Indian Market in an era of Pervasive Broadband

A couple of weeks back I attended the NASSCOM EMERGEOUT Conclave 2011 at Gurgaon, India. While the event featured several interesting sessions and panel discussions, the keynote by R Chandrashekhar interested me specifically. R Chandrashekhar is the Secretary in Ministry of Communications & IT of Government of India. It is always insightful to learn about government’s perception of the industry and the initiatives it is taking for the sector to foster in an organic manner. Since the theme of the conference was around emerging companies, it made all the more sense. Here are my thoughts on the Indian mobile and internet space based on the keynote session.

Indian economy has seen tremendous growth in IT and ITES sector, and much of it can be attributed to the emergence of domestic market. One would want it to mirror the amazing growth of the telecommunications sector in India. Deregulation and liberalization have been key drivers of the telecom market. With over 850 million mobile users, India has a high mobile penetration with near-saturation of the urban market. What ails the Indian ecosystem is the low broadband penetration with only 12.32 million users. Although, recently there has been initiatives for wireless broadband and 3G rollout, there is a long way forward. In a country with approximately 800 million rural population and 550 million people below poverty line, inclusive development is a huge challenge.

For mobile apps, this ecosystem provides both immense opportunities and some awkward challenges. The growing number of users, increasing sales of smartphones, recent 3G rollout, and evolving VAS users are positive signs. However, the steep VAS prices and hazy revenue sharing models present issues in plenty. Another bummer is that the Indian market is dominated by pre-paid subscribers and ultra low handsets.


So what are the development enablers that build the sector and the opportunities around it? While the government has to bring better policies into effect and start initiatives to build the ecosystem, the industry has to serve in product and service creation for existing market as well as work on creation of new markets. The Government of India has already commissioned new Telecom Policy 2011, IT Policy 2011, and National Policy on Electronics 2011 as well as have several initiatives in the works: National Broadband Plan, National e-Governance Plan, UID, Mobile Service Delivery Gateway, National Knowledge Network, e-Education, Skill Development Mission, and e-Health. The National Broadband Plan intends to extend the fibre-optic network to 2.5 lakh panchayats as well as provide last mile wireless broadband to 6 lakh villages. The 3 years plan is a Rs.30,000 crore project.

Telecom Licenses Update: 4 Categories Proposed; Renewal Every 10 Years

The Department Of Telecom (DoT) has come up with some groundbreaking changes to the current licensing scheme for telecom operators in India which might lead to a better service for consumers. The DoT has proposed a new licensing scheme, under which four types of licences would be issued instead of the Unified Access Service License which is provided as of now:

  • Unified Licence: To be issued to service providers. Currently service providers are bound by the Unified Access Service Licence.
  • Class Licence: To be issued to VSAT service providers.


  • License through Authorisation



  • Broadcasting licence


In addition to this new licensing scheme, telecom operators would be required to renew their licenses every 10 years as the new proposal suggests that telecom licences will be given for a period of 10 years only.

According to the current licensing, operators are allowed to hold on to their licenses for a 20-year period. However, with the new licensing scheme, old operators like Bharti Airtel will have to apply for renewal as soon as their current licensing period gets over.

Budget ’11: Mobile Phones To Cost More

The Union Budget which was presented yesterday by the Finance Minister of India received mixed responses from everyone. The budget had it’s impact stated on the telecom sector too. According to the Indian Cellular Association, from now on all the Mobile Phone handsets that are directly imported into India will be expensive by about 5 per cent of their existing market prices.

Also, the mobile phone handsets which are manufactured in India will have their retail price tags raised by about one per cent. However there won’t be any change in the pricing of basic mobile phone accessories due to the Budget. According to Mr Pankaj Mohindroo, President, Indian Cellular Association – the increase in the price of Mobile handsets would pose a further concern for the mobile industry which is already facing a challenge from the unbranded and sub-standard Chinese mobile phones.

Mr Arshit Pathak, Managing Director of Kingtech Electronics which owns the G’Five brand phones has said that this increase in the mobile phone prices won’t affect the customer end price of their handsets and the company would absorb the price increase to benefit their customers.

via Hindu Business Line

Do You Want Big Brother Spying on You?

Back in 2006, the   U.S. Attorney General, Alberto Gonzales, under the Bush Administration, called for new rules that would require ISPs and cell phone companies to collect more data (spy) on all of their users. It’s called Mandatory Data Retention. At the time, there was enough opposition to this idea that it never got far.

Recently, the  House Judiciary Subcommittee on Crime, Terrorism and Homeland Security held a hearing to promote this controversial idea once more. Several members of congress have already proposed legislation on data retention, and support for it is coming from both Democrats and Republicans. The Obama administration’s Department of Justice is also expected to support forced data retention.

Currently, ISPs and phone services already keep transaction records for 90 days, in accordance with the 1996 Electronic Communication Transactional Records Act. After 90 days, the records are deleted, and some law enforcement agencies would like to see these records kept much longer.

Big-Brother-is-Watching-YouSince it’s obvious to many that this is another case of Big Brother is watching, how can these politicians justify their call for more intrusion into business’s and customer’s internet and phone traffic?

Most of this call to action is the result of law enforcement and defense agencies wanting longer retention periods, and politicians that want to look like they are tough on internet crime, such as child pornography. However, privacy advocates such as the Electronic Frontier Foundation (EFF) and the Center for Democracy & Technology (CDT), see it as having bad unintended consequences for user privacy, First Amendment anonymous speech, and ballooning costs for retaining the information.

In my opinion, new laws requiring data retention are going to cause more problems than they solve.

Law enforcement agencies can already ask internet and telecom providers to collect extensive information on suspects. Collecting more data will help law enforcement and Homeland Security catch criminals and terrorists, but these new laws will treat all of us like suspects.

The collected information will seriously clamp down on anonymous speech and whistle blowing. Do you trust the government to stop itself from trying to track down sources of leaked information or people who voice strong anti-government or opposition party speech?

Government and law enforcement won’t be the only ones able to access this data. How many websites are hacked every day? How many government agencies have data stolen from them? We’ve already seen what’s happened with WikiLeaks and government employees who get fooled into giving out information.

It will also make simple visits to legal sites more ominous. Would you want everyone to know you’d visited a site about STDs, mental health, bankruptcy, adult entertainment, or any other normally private topic.

Civil courts will be able to get access to this information. It could be used in divorce cases, to prove infidelity. It could be used in law suits to prove prior knowledge or associations.

The internet and telecom providers can handle the additional open-ended costs of mandatory data retention, since those costs will be transferred to the consumers. It will be the same as a new hidden tax. Smaller businesses, and start-ups may not be able to bear the added costs, thus reducing innovation, and killing competition with the big internet companies.

In summary, new data retention laws would be good for big government, law enforcement and big business. They would be bad for the average joe consumer, free speech and free association. If you don’t agree (or you hate freedom), you have the freedom to comment below.

3G Update: Airtel Launching 3G In 1 Week, Karnataka Gets 3G From Tata Docomo

The 3G rollout to various parts of India has gradually begun and users all over India can now finally start experiencing fast mobile Internet speeds via 3G. Airtel has announced it’s plans of launching 3G service for it’s users in less than a week and Tata DOCOMO, after jumping onto the 3G Bandwagon quite early, has now unveiled it’s 3G services in yet another Indian state – Karnataka.

Bharti Airtel ‘s CEO Sanjay Kapoor told PTI that Airtel   will make the announcement for the commercial launch of our 3G service in next six to seven days. However he did not reveal so as to in what all circles is Airtel planning to launch this service initially. Bharti won the 3G spectrum for 13 telecom circles in India and has given contracts to Ericsson India , Nokia Siemens and Huawei to set up the necessary 3G infrastructure.

In other news, Tata Docomo increased it’s 3G presence all over India by launching it’s 3G service in three areas of Northern Karnataka, namely – Hubli, Dharwad & Belgaum. Tata Docomo’s 3G Network currently supports internet access with high speeds of 21.1 Mbps and the company plans to introduce more products and services with support of NTT DOCOMO.

New Player In Indian Telecom Tower Business: Power Grid

Power Grid Corp. is India’s largest electricity transmission utility company. Most of the huge transmission towers that you see in India, there is a good chance that it has been set up by Power Grid. As part of its diversification plans, Power Grid decided to lease out its electricity transmission infrastructure to independent tower firms and telecom service providers in the month of September this year and in order to find out the feasibility of this project it also hired KPMG as a consultant.

It seems that the study by KPMG is over and the company (Power Grid) now says that 10 to 15 per cent of it’s transmission towers out of approximately 1,00,000 towers in India can be used for setting up telecom towers. This will also boost its bottomline without any new investment. The aim of the company is to leverage its transmission towers set up in remote and rural areas to provide telecom services in these areas.

In it’s recent endeavors, the company has already leased a project in Gangtok for the past a year and it has also been leasing bandwidth on its network to over 70 customers including Bharti Airtel, BSNL, Dishnet Wireless and Tata Communications.

Image Courtesy

Private Telcos May Use BSNL’s Network To Provide Broadband Access

Currently it is only BSNL that provides broadband internet facilities in rural areas of India. However, things are going to change soon. In order to make broadband internet available to millions of subscribers, the Department of Telecom (DoT) has suggested that BSNL’s   last-mile copper lines could be unbundled to private operators.

BSNL has a huge and extensive copper network that caters to 30 million subscribers and this can be ramped up to support millions of more customers. Since BSNL’s fixed line subscribers are gradually declining, unbundling the last-mile local loop in the copper lines will allow private operators to use BSNL’s nationwide fixed line network for offering broadband services to more customers.

Doing this has two benefits. First is, it will bring in additional revenue for BSNL and the Second benefit is that more new consumers can now expect to use fast broadband internet connection. The DoT has also suggested that the excess capacity should be provided to the private players only after BSNL’s own requirement is met.

Aircel Launches Mobile HealthCare Services

With everything that we use in our day – to – day lives, going online – why should health care stay back? Aircel has launched a first of it’s kind tele-healthcare delivery service for mobile phones in association with the Apollo Hospitals Group. Aimed at addressing the healthcare needs of the masses through tele-medicine, this service provides online interactive healthcare in real-time basis by utilising modern technology and telecommunications.

According to Aircel’s Chief Operating Officer, this new service will allow patients to consult physicians and specialists over video for immediate health care. These services will gradually go pan-India and even people living in remote areas, villages and small towns will be most benefited from it. This sounds nice, but the question is in rural areas people are reluctant to spend money for even basic health, so will they go for this all new mobile health care service?

The Aircel Apollo Mobile HealthCare’ service will be available at Rs.45 per month. The service is slated to launch during this Diwali and will be available in Chennai and Tamil Nadu circles.

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Tough New Security Rules For Indian Telecom Operators

The DoT (Dept. of Telecommunications) in India has  laid down strict new telecom security rules which may put the onus on operators to ensure that their networks are secure from every sense. Failure to meet the new requirements can lead to carriers being 500 Million rupees and the carriers could also have their contract canceled. These rules were issued in the form of a license amendment and are intended to resolve security fears over the foreign-built networks, and in particular those from Chinese firms Huawei and ZTE.
The DoT also said that operators are completely and totally responsible for security of their networks and must conduct a security audit on each deployment of routers, switches, VoIP installation and other network gear. Operators are also expected to provide location details of mobile customers within up to 50 meters. The new rules require operators to outline their security plans to the government within 30 working days.

Rs.2000 Cr Goodies For Village Panchayats: Courtesy DoT

The Department of Telecom (DoT) has plans of offering a plethora of freebies to all gram panchayats. These include three broadband connections for every gram panchayat absolutely free of any charge for three years along with free installation of computers and a printer. Not only this, the DoT also plans to provide the panchayats with three telephone connections and one cable TV connection again without any charge.

All this will cost the DoT about Rs 2,000 crore. However all this money will be funded through the Universal Services Obligation fund. This move is basically aimed at helping the rural people experience and relate to benefits of broadband. The DoT is also hoping that the freebies will also soften up villagers to give unobstructed right of way to rollout the infrastructure.

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