V&D100 July 2012 by Dataquest

www.voicendata.com

Special Issue

`100

VOL 19 ISSUE 7 July 2012

Q&A: Sunil Dutt, MD, RIM India

The Business of Communications

Surprisingly

Good

Unexpected growth, led by cellular, saved Indian telecom Telecom Services Revenue `471 `7,003 crore crore

`6,971 `500 crore crore `25,637 crore

`25,705 crore

`18,598 crore

`21,856 crore

`118,537 crore

`12,148 crore

`101,434 crore

Volume-2

Change %

Cellular

16.86%

Fixed

-18.72%

NLD

-14.91%

ILD

0.27%

Broadband

-0.46% 6.16%

VSAT Overall

`14,946 crore

FY 2011-12 (`182,459 crore)

Segments

6.49%

FY 2010-11 (`171,347 crore)

7, 10

4 6

9 3

126 pages including cover

Top 10 Telecom Service Providers

Special subscription offer on Page 110

contents

Website: www.voicendata.com EDITORIAL

GROUP EDITOR: Ibrahim Ahmad EDITOR: Pravin Prashant SR ASST EDITOR: Gyana Ranjan Swain SR CORRESPONDENT: Ritu Singh CORRESPONDENT: Akanksha Singh, Malini Nagaraj EDITORIAL ADVISOR: Prasanto Kumar Roy

DESK

EXECUTIVE EDITOR: Atreyee Ganguly SR ASST EDITOR: Shobha Sivakumar SUB EDITOR: Charu, Ruchika Goel ASST MANAGER DESIGN: Bhagbat Pattnayak, Harnek Singh, Pramod S Rawat COVER DESIGN: Harnek Singh

BUSINESS

CORPORATE HEAD of SALES & MARKETING: Satish Gupta (satishg@cybermedia.co.in) MARKETING: Manish Uniyal (Mgr Audience), Gulnar Oberoi (Asst Mgr Mktg), Niketa Chauhan (Exec Mktg), Arvind Razdan (Exec Mktg) DELHI/NCR Amresh Mishra (Asst Mgr Sales), Ratul Mallik (Exec Sales) BANGALORE Venkatesh L (Mgr Sales), T Roshan Sahadevan (Mgr Sales), Pradeep Kumar (Exec Sales) MUMBAI Shahid M Malek (Mgr Sales), Meenakshi Madan (Asst Mgr Sales) PUNE Sunay Choudhury (Mgr Sales) CHENNAI Jayan A (Exec Sales) KOLKATA Sandeep Roy Chowdhuri (Sr Mgr Sales) HYDERABAD Srinivas S (Asst Admin) INTERNATIONAL Vikas Monga (Mgr Sales)

OPERATIONS

GENERAL MANAGER: CP Kalra SR MANAGER: Anuj Sharma MANAGER: Debabratta Joshi

SHARED SERVICES

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OVERALL ANALYSIS

Surprisingly Good! The unexpected growth, led by the cellular industry, saved Indian telecom from total disaster The V&D 100 Top 10 Club Airtel

Vodafone Thanks

to Trai’s heavy handedness, operators’ RoI and 100 BSNL expansion plans will go for a toss 102 RCom

105

Idea

106

Tata Comm

108

TTSL

112

Aircel

114

MTNL

116

TTML

118

Emerging Technologies M-COMMERCE

46 / Interview of the Month ‘Today customers are neither too upset nor very happy with their operators’ —Sunil Dutt MD, RIM India

FTTH

California Huson International Media President, 1999, South Bascom Avenue, Suit 1000, Campbell, Ca95008, USA Tel: +1-408-879 6666 Fax: +1-408-879 6669

Reality Mining

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Mobile and Cloud Convergence

Voicemail.............................................................. 08

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M2M

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Tele-Stats.............................................................. 12

Software Defined Networking

Subscription: Foreign— US $40 (SAARC Countries), US $50 (Rest of the world)

| VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Regulars Editorial............................................................... 10 News & Views..................................................... 16 Perspective......................................................... 124

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Delhi +91 9650020068 Kolkata +91 9831180207 Chennai +91 9500046061 Bengaluru +91 9741910360 Mumbai +91 9321111483 Pune +91 9689529563

contents

Contributed

segment analysis

Analysis Reliance Infotel’s 4G Plans

Roaming Services Free Roaming — At What Cost?

Free roaming across the 22 circles of the country is cited as one of the main policy reforms in the recent cabinet approved NTP 2012. What is the impact for subscribers?

The voice market is saturated. Telcos are now looking at data/broadband in a big way, with support from the government

64 Wireless The Balancing Act

Marred by various issues like policy uncertainty, license cancellation, and reluctant expansion, somehow the industry managed to maintain the momentum

72 36

Policy Will the Telecom Spectacle Continue?

Fixedline Time to Bid Adieu?

A few services may bring some cheer to fixedline services, but it’s hard to gain traction and increase revenues

Government should promote policies that enhance access and usage. Revenue will automatically come in

NLD Downward Strides

LTE LTE Networks: Service and Efficiency

Consumers have great expectations from the LTE service providers and are expecting high Quality of Service (QoS) to get better experience

IPv6 What Enterprises Should Do about IPv6

Guidance on how IPv6 should be included in network design, planning, and operations

Broadband

Yet To Pick Pace

Multi-vendor and multi-technology complexities are forcing operators to move towards managed services

VSAT On the Fast Track Banking and finance rocked the VSAT industry in FY12 with steadfast deployments

120 Event REPORT

The Indian NLD market has entered a growth mode only with the usage increasing and but not translating into proportionate revenue

Managing a Perfect Service

ILD continues to face capital constraints in several parts of the world, as providers are concentrating now on investments in core business capabilities

122

ILD Slowing Down

The Eurozone crisis opens up new frontiers for BT in emerging markets like India in the Asia Pacific region

Analysis Nokia: All Set for a Comeback

In line with its restructuring, Nokia cuts 10,000 jobs and replaces top executives

| VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

VOICEMAIL

Micromax Funbook: Fun with Funbook This is with regard to Micromax tablet review ‘Fun with Funbook’ (VOICE&DATA 100, June 2012). Can I connect this tablet to a projector? Can I use PowerPoint on this tablet? n Vijaykumar via Email

Data Card: Long Live the Card!

JUNE 2012

OSS/BSS: On its Toes This is with reference to an analysis of OSS/BSS market in India (VOICE&DATA 100, June 2012). It is one of the best that I have read in many days. I completely agree that the need for a convergent OSS/BSS platform for rapid development and deployment of new services and applications has become inevitable for the operators. The ability to quickly introduce new improved services and managing and delivering better customer experience are the critical factors to increase revenue and ARPU. n Shashi Shekhar Pandey, manager, marketing, Aricent Group via Email

Test & Measurement: Smooth Sailing This is with regard to a story ‘Test & Measurement: Smooth Sailing’ (VOICE&DATA 100, June 2012). It is great piece of work. n Mano via Email

s e n d y o u r f e e dback FOR US t o s e r v e y o u better...

For subscription related issues, contact us at

rsevoicendata@cybermedia.co.in You can also write to Reader Service Executive, VOICE&DATA, Cyber House, B-35 Sector 32, Gurgaon-122 001, Haryana Fax: 91-124-2380694

This is with reference to a story ‘Data Card: Long Live the Card!’ (VOICE&DATA 100, June 2012). Nice article and comprehensive study. Good going on this analysis. n Andre, Micromax via Email

Who is Responsible? The latest National Telecom Policy (NTP2012) pompously announces that voice over internet protocol (VoIP) will be permitted. The DOT did not allow its full use in India. Voice allowed VoIP from PCs to PCs within India and from PCs to telephone instruments in foreign countries. No explanation was then given as to why VoIP from instruments to instruments within India was not allowed. No explanation is now given as to why it is being allowed now, 10 years after its availability in the world. If only the DOT either by itself or through licence allowed an email exchange within India, the necessary technology and software would have been developed within the country. The DOT graciously permitted the opening of such an exchange only recently. n Dr TH Chowdary via Email

Handsets: Vanishing Act This is regarding the article ‘Vanishing Act’ (VOICE&DATA, June 2012). I was looking for market growth figures of iPhone handsets in the recent weeks, and thus came to read your article. I was surprised to find that you haven’t included ‘Apple’ in the top 10 players by market share. If you compare the sales revenues of iPhone during FY11-12, it would certainly exceed `1,000 crore. In fact, one of the iPhone distributors ‘Beetel Teletech’ may have sold more than `750 crore of iPhones during the last fiscal. If you consider iPhone’s wide acceptance in top end consumer market in

| VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

India, I would imagine it to be amongst top 10 players. Hence, I am very interested to know the facts from your research regardinig Apple handsets’ performance in India. n Jayant Deo, president, RAD India via Email

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editorial

The Animal Spirit The impression one now gets is that our former FM Pranab Mukherjee was doing (or was required to do) a lot of other things rather than focus on his main job then – to get moving on economic reforms, and keep India’s GDP growing at a significant pace. Perhaps that is why as soon as Mukherjee was out of the way, PM Manmohan Singh has taken direct charge. That is why he wants the ‘animal spirit’ back in his government. Today our economy is perhaps the single biggest concern, and everybody in the industry is very happy to see Manmohan Singh take charge of that front. The new finance minister could decide the fate of Indian economy as well the Congress lead UPA, the present government. If Manmohan Singh does a good job, the UPA government, has a big chance to form the government again in 2014. My assessment is that if our new Finance Minister can turn the economy around – or demonstrate he is taking strong steps in that direction – voters will bring UPA back. The problem is that the present government seems to have got into a policy paralysis, a term that has become very popular these days. The opposition is in shambles, and the President’s election campaign further proved that. On corruption there is not much to differentiate between UPA and NDA, except that UPA has been punishing the culprits and NDA has been too weak to deal with them. So it is essentially the economy that is the differentiator, and can bring UPA back. There is clearly an opportunity for Manmohan Singh. The big question, therefore, for Sonia Gandhi and Manmohan Singh should be how will the economy be brought back on the growth path. The job is clearly cut out – control inflation, enthuse domestic markets, create an environment conducive for investments, start market and governance reforms again, and bring back the focus on infrastructure. I see no reason, why UPA cannot attempt doing it in the roughly two and half years they have before the next elections. While the PM drives finance, he should also re-shuffle his cabinet and get good and effective ministers in other areas too because they will have to finally implement the finance ministers goal. Obviously, equally if not more important will be the need to have all other ministers to work in harmony. Either the PM or someone will have to make sure that the government works like a single team. This government has so far been much open to the suggestions and feedback from the industry that in the past, though not much action was taking place after that. I believe this is the time, the industry should unitedly rally behind the Prime Minister and work closely to get things moving. Sources in the South Block indicate in the government once again wants to work very closely with the industry. This is a great opportunity for the industry too.

<ibrahima@cybermedia.co.in> 10 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

TELE-STATS

Statistics on gsm City/Circle Metros

Apr’12

May’12

% Growth Over Previous Month

Subscriber Base

Delhi

28,257,714

28,657,607

1.42

Mumbai

22,610,283

22,564,561

-0.20

Chennai

10,833,087

10,855,172

0.20

Kolkata

15,663,709

15,691,908

0.18

Total

77,364,793

77,769,248

0.52

A Circle

Subscriber Base

Maharashtra

50,132,650

50,846,506

1.42

Gujarat

41,470,879

41,760,446

0.70

Andhra Pradesh

49,278,810

49,832,272

1.12

Karnataka

37,997,699

38,295,265

0.78

Tamil Nadu

52,066,109

52,441,046

0.72

230,946,147

233,175,535

0.97

Total

B Circle

Operators

Subscribers

% Market Share

Bharti airtel

185,300,293

27.34

Vodafone Essar

152,487,270

22.50

IDEA

115,965,604

17.11

BSNL

94,677,766

13.97

Aircel

64,392,424

9.50

Uninor

45,076,495

6.65

Videocon

6,240,442

0.92

MTNL

5,316,727

0.78

S Tel

3,430,288

0.51

Loop Mobile

3,266,757

0.48

Etisalat DB

1,692,673

0.25

677,846,739

100.00

Subscriber Base

Kerala

26,513,793

26,731,968

0.82

Punjab

22,633,206

22,425,058

-0.92

Haryana

15,389,637

15,494,597

0.68

UP (W)

38,771,859

39,283,622

1.32

UP (E)

57,511,740

58,952,978

2.51

Rajasthan

35,395,072

35,892,337

1.40

Madhya Pradesh

34,749,602

35,341,559

1.70

West Bengal and A&N

33,846,067

34,038,702

0.57

264,810,976

268,160,821

1.26

Total

Market Share-May, 2012

All India

Source: COAI

Region-wise Broadband Ranking

Source: Point Topic

C Circle Himachal Pradesh

Subscriber Base 5,705,836

5,755,465

0.87

Bihar

47,661,688

48,367,497

1.48

Odisha

19,682,059

19,803,386

0.62

Assam

11,264,610

11,456,450

1.70

North East

7,466,429

7,556,498

1.21

J&K

5,670,529

5,801,839

2.32

Total

97,451,151

98,741,135

1.32

670,573,067

677,846,739

1.08

All India

12 | VOICE&DATA | July 2012 | voicendata.com | A CyberMedia Publication

Statistics on CDMA Wireline Network

Wireless Network

Mar’12

Apr’12

% Growth Over Previous Month

Bharti airtel

3,269,949

3,270,203

0.01

Reliance Communications & RTL

1,269,750

1,269,452

-0.02

Quadrant Televentures (Formerly HFCL)

200,432

200,999

Sistema Shyam Teleservices

46,659

Tata Teleservices All India

Operator

% Growth Over Previous Month

Operator

Mar’12

Apr’12

Reliance Communications & RTL

153,045,692

153,548,424

0.33

1,331,392

1,426,916

7.17

0.28

Quadrant Televentures (Formerly HFCL)

47,293

1.36

Sistema Shyam Teleservices

15,803,039

16,007,995

1.30

1,441,370

1,446,089

0.33

Tata Teleservices

81,745,797

81,229,732

-0.63

6,228,160

6,234,036

0.09

All India

251,925,920

252,213,067

0.11

Source: Association of Unified Telecom Service Providers of India (AUSPI)

ITU Statistics

Internet Users per 100 Inhabitants, 2011* Internet Users per 100 Inhabitants

2011*

Europe

74.4

The Americas

56.3

CIS**

47.6

World

34.7

Arab States

29.1

Asia & Pacific

27.2

Africa

12.8

Estimated Internet Users (In Mil- 2006 lions)

2011*

Developed

649

915

Developing

503

1,505

Total

1,152

2,421

Internet users, by level of development

Internet users per 100 inhabitants 2011* 80

Internet Users, By Level of Development

2006

2011

70 60

Developed

Developing

Developed

35 29

Developing

13 10 0 Europe

The Americas

CIS**

World

Arab States

Asia & Pacific

Africa

*Estimate The developed/developing country classifications are based on the UN M49, Source: ITU World Telecommunication /ICT Indicators database A CyberMedia Publication | voicendata.com | July 2012 | VOICE&DATA | 13

Analysis TELE-STATS

Top 20 Broadband Countries Country

Q1 2011

Q4 2011

Q1 2012 % Growth Qtr % Growth Yr

China (all territories)

137,919,667

157,513,413 164,360,777

Qtr Add

Yr Add

4.35

19.17%

6,847,364

26,441,110

USA

88,787,828

91,631,760

93,264,503

1.78

5.04

1,632,743

4,476,675

Japan

34,555,100

36,695,200

37,012,100

0.86

7.11

316,900

2,457,000

Germany

27,317,300

28,499,900

28,877,600

1.33

5.71

377,700

1,560,300

France

21,722,400

22,766,200

23,122,600

1.57

6.45

356,400

1,400,200

Russia

16,606,900

20,376,855

21,161,900

3.85

27.43

785,045

4,555,000

19,911,100

20,736,500

21,093,600

1.72

5.94

357,100

1,182,500

South Korea

17,399,028

17,915,007

18,096,027

1.01

4.01

181,020

696,999

Brazil

14,489,600

16,518,500

17,107,500

3.57

18.07

589,000

2,617,900

Italy

13,373,650

13,781,650

13,870,650

0.65

3.72

89,000

497,000

India

11,500,493

13,333,827

13,697,791

2.73

19.11

363,964

2,197,298

Mexico

11,738,149

12,487,401

12,740,353

2.03

8.54

252,952

1,002,204

Spain

11,266,692

11,610,284

11,777,921

1.44

4.54

167,637

511,229

Canada

10,661,316

11,083,633

11,166,932

0.75

4.74

83,299

505,616

Turkey

7,211,035

7,507,829

7,777,829

3.60

7.86

270,000

566,794

Netherlands

6,326,100

6,622,400

6,719,500

1.47

6.22

97,100

393,400

Australia

5,662,200

5,781,200

5,853,800

1.26

3.38

72,600

191,600

Poland

5,395,267

5,708,229

5,803,689

1.67

7.57

95,460

408,422

Taiwan

5,281,000

5,589,000

5,695,597

1.91

7.85

106,597

414,597

Ukraine

4,330,000

5,216,000

5,491,500

5.28

26.82

275,500

1,161,500 Source: Point Topic

Technology breakdown for fixed broadband Technology DSL FTTx (Inc. FTTx+ VDSL, LAN etc.) Cable Modem FTTH

Q1 2011 344,027,755 66,358,688 108,785,269 13,319,735

Q4 2011

Q1 2012

361,467,393 369,898,515

Quarter % Growth

Year % Growth

Qtr Add

Yr Add

2.33%

7.52%

8,431,122

25,870,760

87,732,354

4.40%

32.21%

3,695,702

21,373,666

115,747,347 118,005,682

1.95%

8.48%

2,258,335

9,220,413

5.48%

24.03%

858,484

3,200,249

84,036,652

15,661,500

16,519,984

Table 3: Technology breakdown for fixed access broadband Source: Point Topic 14 | VOICE&DATA | July 2012 | voicendata.com | A CyberMedia Publication

NEWS

and

VIEWS

interview

‘With cloud computing, organizations gain exactly the system resources they need, on demand’ groups across the organization, it can be difficult to manage costs and quickly respond to individual user needs. With cloud computing, organizations gain exactly the system resources they need, on demand. They can also benefit from high levels of performance, availability, and security.

Michael Kiss senior solutions manager, Verizon South Asia What is the roadmap for Verizon enterprise mobile products and solutions for 2012? Verizon’s Enterprise Mobility services offer a variety of secure wireless and wireline options to extend corporate network access to remote workers—a growing priority for organizations wishing to maximize productivity while controlling costs. The solution enables Verizon business customers to reduce the administrative costs associated with on-the-go networking while addressing the varying attendantaccess-security requirements. To help enterprise customers select the most appropriate services for their specific business needs, Verizon offers flexible flat-rate and usage based pricing plans for its individual and combined global dial and Wi-Fi services. What scope do you see for cloud computing in data centers for enterprises as well as telcos? As organizations grow and evolve, their data centers can quickly multiply to serve a myriad of needs. With computer rooms being established and managed by diverse

Security of data with high-speed IT services is the need of the hour for telcos. With 4G coming into India, how can companies like Verizon cater to such crucial concerns? Verizon can combine 4G LTE access with its global private IP network service to create a secure, high-speed, high-capacity business platform. Enterprises across a range of industries can tap into the power of 4G LTE wireless network integrated with end-to-end private networks. Whether it’s used as reliable back-up solution for ATMs or as a primary network solution for mobile video collaboration, this platform will introduce new revenue streams and help customers control costs. Please explain the various enterprise mobility solutions that are gaining prominence globally. Today’s businesses are increasingly on the move. The acceleration of the mobile workforce is driving the need for enterprises to deploy more advanced tools and capabilities to facilitate, manage, monitor, and secure an increasingly dispersed workforce. Getting the right information at the right time to the right people in the right place has never been more important. Today’s businesses are embracing new ways to communicate, whether it’s voice over IP or unified communications to address a highly dynamic and often 24x7 work environment. Ritu Singh ritus@cybermedia.co.in

16 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Intex Unveils Touch Screen Phone Intex is all set to tap the touch screen portfolio and it intends to target 25% of revenue in mobile business from touch screen category in FY13. Intex has launched a dual-SIM touch screen phone—Intex Cola—priced at `2,190. Intex Cola comes with features such as 6.1 cm resistive and 2.4 inch wide screen, 1.3 mega pixel camera with flash. It also comes with mobile tracker, 3.5 mm jack for audio output, expandable memory up to 8 GB and Li-Ion 1,000 mAh battery. It is available in black and white colors.

Tata Comm Launches Low Latency Network Tata Communications has launched a low latency network which can connect major financial capitals in Asia, the UK, and the United States to offer global connectivity scalability and flexibility with ethernet technology. This network is backed by 802.1ah, Provider Backbone Bridging (PBB) technology. It enables the customers to work with a single global supplier instead of multiple country-specific point-to-point network providers.

BT Unveils Assure Analytics BT launched Assure Analytics, a new security data analysis service to help organizations to simplify big data and security challenges. “Assure Analytics enables organizations to make informed split-second decisions and develop effective long-term policies to govern their use of resources and responses to potential risks and security threats across their infrastructure and operations,” says the company’s statement. A few UK telecom networks have deployed Assure Analytics to protect from copper theft. The service is helping the company analyze crime statistics, fault reporting, and geographical information—highlighting patterns and theft hotspots to inform its prevention and response policies.

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‘We have partnerships with almost all large content owners who have good content for the digital world’ viewing experience. We stream at low bandwidth and also save user money on their data cost.

Shabir Momin CEO, Zenga TV

What trends do you see for mobile TV in the Indian market? I believe that this is just the beginning for mobile TV in India. As the handset market is growing and price of smartphones are coming down to almost the same price as feature phones, the network is becoming better and more and more content is being made available on mobile TV. Stats show that there is already higher internet users on mobile then on broadband which directly implies that this will be the same case in future where there will be more viewers for TV and video content on mobile than on regular TV. What are the reasons that this service has not picked up stream? The pricing model, lack of content on the platforms/services, lack of good technology powering the services, lack of user engagement focus on the technology, and content planning is what lead to this low uptake. I believe that changing all this will make it grow exponentially, like it has done for Zenga TV as we do not work with operators or charge the users, we provide rich content and richer

What are your company’s business propositions since 80% of mobile users have feature and low-end phones? Zenga TV has addressed that market too, we can stream even on the S40 devices, which is the lowest kind of configuration a stream can be done at. But having said that India is unique in this space and an average life of a phone per individual is about 6 months unlike in the west where it is for 3 years. Which is why the low configuration feature phones will flush out of the market soon and either high configuration new generation feature phones which have more capability to deliver or low prices smartphones will come to market improving the experience. Is the revenue sharing model with operators sustainable for a business like yours? What do you foresee when 3G and 4G would be co-existing? No. The revenue sharing model in practice is not suitable for doing a profitable business and that’s the reason we did not do the same. Going forward the model will change and newer models will come in to picture which will be a win-win for the ecosystem. There are not many players in this business in India. What are the possible reasons? This space will always be with less players, as the cost of content acquisition, technology, and other things are high and only serious long-term players will come and sustain in this market. There will be fly-by-night operators which will also come as the market matures but only strong players with owned technology, exclusive content, and a good user base will survive the long run. Gyana Ranjan Swain gyanas@cybermedia.co.in

Wishtel to Invest `15 crore for Designing and Manufacturing Wishtel is planning to invest `15 crore for ramping up its design, manufacturing, and software engineering capabilities. The ramped up capacity will help in meeting growing global demands for the company’s market leading tablet products and turnkey solution services. Wishtel has already shipped over 50,000 devices and expects to reach monthly volumes of 100 thousand per month in the second half of 2012. To meet this growing demand, Wishtel is expanding the capacity of its manufacturing facilities in Mumbai and Kandla, Gujarat.

Qualcomm Acquires Summit Microelectronics Qualcomm has acquired Summit Microelectronics (Summit), a developer and provider of programmable power integrated circuits based in Sunnyvale, CA. Qualcomm’s power management roadmap is expected to be enhanced with the addition of Summit’s expertise and products. As a result of the acquisition, Qualcomm will be able to offer a robust portfolio which will address a broader set of customers and complex design challenges. All employees of Summit Microelectronics have joined Qualcomm’s CDMA technologies division.

Telenor, Alcatel-Lucent Launch Digital Content Store in Serbia Telenor is on an agreement with Alcatel-Lucent to launch Digital Media Store (DMS) in Serbia and to deliver personalized digital content to its subscribers in Europe and Asia. The store gives customers in Serbia, an access to a wide variety of personalized digital media services such as music, applications, games, e-books, and videos. Telenor will later deploy DMS solution on a country-by-country basis. As a part of the partnership, AlcatelLucent’s DMS enables Telenor to provide its customers with a rich blend of services and content and more from a single cloud based ‘entertainment hub’.

A CyberMedia Publication | voicendata.com | JULY 2012 | VOICE&DATA | 17

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RCom Partners with Bigflix

‘ABS India will tap the networking space’ Integration of both applications and infrastructure on to a single IT infrastructure is gaining prominence. Organizations are keen on enhancing the utility. Which are the sizable verticals for UC? Large corporates are adopting UC in a big way. Government and public sector undertakings, defense, hospitality, and transportation are the major verticals for it. Defense was more concerned about security on IP but the sector has exuded the myths.

Sunil Arora CEO and director, ABS India

How is the Unified Communications market maturing in India vis-a-vis global? Indian Unified Communications market is yet to surmount. In India, it has picked up pace and is maturing at a higher level. Globally, developed markets like the US, Europe, and others have made a complete transition to Internet Protocol (IP) in the past 4 years. But in India, the network is on Time Division Multiplexing (TDM) mode. Unified communications is being delivered on TDM and IP combination. Although there is a transition towards IP and applications on IP are in an evolution mode and have not reached saturation. Even in the next 5 years, India is more likely to be on a combination of TDM and IP due to cost sensitivity. IP as a technology is not expensive but IP equipments are expensive and this is the biggest deterrent and India is losing out. In the next 5 years when the volume of IP grows, the cost of IP equipment may reduce and adoption will escalate. When the IP sets grow, it will boost innovation. What are the trends in the market? A shift to IP network is the primary trend.

How is ABS India performing in the UC market and what are your strategies? We are in the communications equipment space from the past 15 years. We have maintained a steady growth and are aiming to catapult in to an exponential growth rate. We are enhancing both the sales and service team. In the next couple of years, we aspire to see ABS India as one of the top 3 system integrators in India. We have the expertise with us—deploymental and maintenance capabilities. Currently, we have 7 offices and have presence in 35 locations. We are expanding our offices, infrastructure, and people. We are investing on expanding the business and reach in the market place. Nepal and Maldives are the major markets for us apart from India. ABS had not been a major networking player. As it is one of the growth areas along with the applications segment, we will tap the market. We are expanding on areas like Wi-Fi and data networking. And we intend to be an end-to-end player in the market. We are currently working with Alcatel-Lucent, NICE, and Aruba Networks. We are procuring a lot of demo equipment, primarily to give hands-on experience to customers. We have a demo lab and training facility. Malini N malinin@cybermedia.co.in

18 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

RCom partnered with Bigflix to offer streaming video services to its 3G customers in the country. This offer would allow the customers to stream and watch full length movie for a price of `30 each. The operator would not charge anything for its data usage during the movie streaming, the company said in a statement. Unlike any other video streaming service, here the consumer pays only for the content and not for the data that has been used to view this content. This service is available across the Reliance network nationally but for the best experience, 3G handset with 3G data connection is desired.

Samsung SDS Upgrades Network Samsung SDS, a subsidiary of Samsung Group and information and communications technology service provider has upgraded its network with intelligent optical mesh technology. It has deployed Ciena’s intelligent packet-optical switching, packetoptical transport, carrier ethernet (CES), and ON-center management suite solutions to create its own private network.This network will connect offices and employees across multiple locations globally.

Comviva to Offer Financial Services on Hosted Model Comviva has announced its readiness to provide its Mobiquity, mobile financial platform on a hosted model.This new approach will reduce operational costs, faster time to market, and provide a fully managed mobile financial platform to the banks/financial institutions and network operators in Americas, Europe, Africa, and Asia. This will further extend benefits to the partners in the ecosystem’s retailers or merchants/billers and end consumers towards rapid uptake of mobile payment services in these countries.

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‘AppliedMicro bets big on the server market’ AppliedMicro is set for long-term investment on the talent pool in India. One of our approaches is that we seed highly qualified people from North America here, I look at it as an investment. We invest as there is a raw talent which is extremely capable provided they are given right guidance and training. We hire mix of people—both freshers and medium experienced. We have an internship based model. We provide formal and on-the-job training, 20% of the engineers’ time, money, and effort go into acquiring new knowledge and skills.

Parthiban Kandappan vice president, co-general manager, transport business unit, AppliedMicro What is the role of Indian design centers in AppliedMicro’s development? We have 2 design centers in India—Pune center was launched nearly 4 years back and the Bengaluru center has been launched recently. Chip verification is executed exclusively out of India and Vietnam. Pune center has around 130 people. With the recent launch of our second design center in Bengaluru, we intend to drive advanced design and development of computing and connectivity solutions for enterprise and cloud data centers. Bengaluru is a part of a virtual team that we have in North America, Vietnam, and India. In the next couple of years, we intend to enhance Bengaluru to be a selfsustained center which can conceive and design chips. Bengaluru will be a design, application, and a customer service center. We are currently working on a next generation transport network chip and a substantial portion of that chip is being handled by the team in Bengaluru. In near future, 50% of our development will end up being in India. What is your approach to enhance efficiency in human resource?

What is new happening at AppliedMicro and how is the company performing? We have introduced our flagship product, ‘X-Gene,’ the world’s first 64-bit ARM architecture compliant processor for next generation cloud computing, wireless infrastructure, enterprise networking, storage, and security applications. Last 2 quarters have been sluggish particularly in processor business unit. While, the other transport business unit has been profitable and has an enviable margins (though we do not break it up). Yet, we have invested last year and we would continue investing next year, as we intent to advance from a small fabless company to a medium fabless company. We are betting big on server and ethernet market. What are the advantages that a fabless company has over a fab company? A very few people can set up a fab company as many people cannot invest $5-10 bn. Fab demands multiple technologies and it cannot be profitable unless a critical mass of designs come, as one’s own design would not be sufficient to populate. Fab has a broad spectrum from telecom to compute to consumer goods to games. Malini N malinin@cybermedia.co.in

20 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Airtel Launches M-agriculture Service in Rajasthan Bharti airtel, in association with value added services (VAS) provider Handygo Technologies, launched ‘Behtar Zindagi’—a mobile based service for farming and allied communities across Rajasthan. Customers can avail this service by dialing 556780 (toll free) and availing the subscription pack at a charge of `30 for 30 days. This service supports a wide range of dialects and is available in Hindi and 17 other regional languages. The ‘Behtar Zindagi’ service is available for farmers 24x7 and 365 days of the year. Behtar Zindagi offers services such as weather updates, mandi rates, live stocks, agriculture, fisheries, health, education, and finance.

Motorola Mobility Brings RAZR Family to India Motorola Mobility is bringing the longest-lasting smartphones, Motorola RAZR MAXX and Motorola RAZR V to India. These phones will also be available in Indonesia, Malaysia, Singapore, and Thailand market. In India, Motorola RAZR MAXX will be available in select cities at select retail stores for a recommended retail price of `31,590. Motorola RAZR V will be available with Android 4.0 during the third quarter of the year.

NSN, Everything Everywhere Partner to Drive M2M Everything Everywhere, the UK’s communications company and Nokia Siemens Networks have announced a global partnership to increase revenues through machine-to-machine (M2M) connectivity and to create interactive, cloud-connected vending machines. This alliance will offer vending machine owners the opportunity to increase revenues and reduce costs through remote stock monitoring, increased customer interaction, and multiple payment methods.

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‘Power cos are leaning towards energy efficient solutions to help operators reduce their opex’ Across the globe we are present wherever data is created, transmitted, or stored. For protection of large and medium data centers and security systems, APC by Schneider Electric provides industrial strength battery back-up, cooling solutions, and data center management software. We have started a new business vertical which provides audit, assessment, and consulting services for better data center infrastructure management. It audits the health of data center and checks its performance in terms of energy efficiency, space, flexibility, and availability.

Jaybalan Velayudhan director, strategy & biz dev, IT business, APC by Schneider Electric What are the key market trends you identify in the power management segment? It is important to define how APC by Schneider Electric is involved in power management. We are a provider of backup power products and services which include surge suppressors, uninterruptible power supplies (UPS), power conditioning equipment, and power management software in the market. One of these trends is a movement towards higher power densities in data centers where consolidation, high density servers, and virtualization are major drivers. Energy cost reduction is also an ongoing trend which has led to a more standardized approach in designing and building data centers. Another major trend is creating the ideal cooling system for data centers that will take into consideration the various parameters for operation like density, peak vs average load, and other criteria for day-to-day operations. What are your company’s initiatives to reduce power consumption?

How do you see the next fiscal and what are the new changes that you would like to bring in your company? Companies in the telecom space and big data centers are leaning more towards energy efficient products and solutions to help operators reduce their operating expenses. Organizations will continue and even accelerate consolidation efforts within and among data centers to improve overall energy efficiency through greater economies of scale. Most data center operators will have a virtualized and load balanced infrastructure even in telecom. Current trends in power management show that businesses are going for more integrated solutions. They prefer scalable and modular deployments. On the design front, power management products are being designed with higher wattage per cubic inch due to the steep increase in property prices. With India’s economy set to grow at a brisk pace and with the continued power deficit situation, the demand for alternate or back-up power solutions in the form of generator sets, power inverters, and UPS solution are expected to witness a healthy growth in the coming years. Ritu Singh ritus@cybermedia.co.in

Cisco Introduces Mobile Network Platform Cisco has introduced the foundation for a new generation of mobile internet networks, the Cisco ASR 5500 platform. This new mobile platform increases performance by up to 10 times, said a press statement. The new Cisco ASR 5500 system extends the Cisco ASR 5000 series. Cisco ASR 5500 platform was designed to capitalize on the breakthroughs in software architecture optimized on new, purpose-built hardware, adds the statement.

ValueFirst acquires mGinger.com Bengaluru based mobile marketing firm, mGinger.com has been acquired by its partner ValueFirst, a digital media company. This acquisition enables ValueFirst to add another 4 mn highly profiled opted-in registered users to its existing 50 mn users. ValueFirst’s focus on priority is to scale its media business. It is undecided on mGinger’s deals and is evaluating the deals segment of mGinger. The company intends to extend the permission based approach to market beyond SMS to various platforms like internet, voice, and email. In the recent months, mGinger had pivoted to promoting deals.

71 mn Use Multiple SIM Cards Nearly 71 mn subscribers use multiple SIM cards across India. Moreover among 14% of multi-SIM card users who plan to buy a new handset, 75% intend to choose a dual-SIM card handset, says a study by Nielsen India. The study says that 4 out of every 5 multi-SIM card users own a single handset. Over 7 out of 10 multi-SIM card users polled intend to acquire a dual-SIM phone. For every 2 out of 5 multi-SIM users, the expenses have remained consistent. Only 12% users have reported a substantial rise in costs. The study revealed that the smaller operators have a relatively higher share among multi-SIM card users.

A CyberMedia Publication | voicendata.com | JULY 2012 | VOICE&DATA | 21

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Ford Selects Nokia’s Location Platform

‘We expect a slow uptake of LTE small cell software’

Nitin Pai vice president, head of marketing, Tata Elxsi What were the key developments in FY12 for Tata Elxsi? FY12 turned out to be an exciting year for Tata Elxsi with strong performance across all dimensions. On a consolidated basis, the total income for the financial year grew 29% y-o-y to Rs 539 crore. Consolidated PBT grew by 73% over FY11. During the financial year, the company has closed multiple deals for wireless broadband solutions including femtocells with leading tier-1 OEMs. We have also engaged with leading telecom product companies to support their 4G product development. We have engaged on next generation Android smart phone development projects with some leading OEMs. In the automotive sector, we are seeing traction for sophisticated wireless connectivity for infotainment, telematics, and diagnostics. What is the scope of LTE Femtocell market in India? Though femtocells are gaining traction globally, business models are still being evolved for widespread deployment. The large ad-

dressable market, high growth rates, and low penetration for the small cell software indicate significant headway for future growth. However we expect a slow uptake of LTE small cell software in India primarily due to delays in operator commitments/ commercial deployment of LTE. However having said that, OEMs are investing significantly in LTE R&D, targeting these developed countries in near term. As a technology, protocol stack and service provider, we target OEMs and ODMs which are addressing the small cells market. Our revenue from India will most likely be indirect through the OEMs with whom we are engaged. In India, a few service providers are planning to deploy femtocells driven by 3G expansion plans and commercial deployment of 4G LTE. We would like to target the OEMs which will be supporting India specific requirements though there aren’t many. Tata Elxsi is also working with leading silicon vendors to implement our LTE femtocell software on upcoming system-on-chip platforms (SoCs) that will help in addressing aggressive price points demanded by this industry. Has Tata Elxsi considered to invest in broadband wireless solutions using TV white space and unlicensed spectrum? TV white space has interesting implications for backhaul. We are working with some companies in exploring this further. Tata Elxsi has already built technology and systems for unlicensed spectrum. We have worked with a company in the US to develop backhaul solutions based on WiMax for smart grid that operates in the unlicensed spectrum band. This allows utilities to aggregate data from sensors, smart meters, etc, in both transmission and distribution aspects of its services. This has been successfully deployed with 2 utilities and is being trialled with many others. Akanksha Singh akankshas@cyberemdia.co.in

22 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Nokia has announced that Ford’s research organization will use Nokia’s Location Platform to advance innovation for smart and connected vehicles, as demonstrated by the Ford EVOS concept car. Ford selected Nokia Location Platform to leverage Nokia’s high-quality global location content, including the industry leading NAVTEQ Map, as well as scalable cloud services and APIs. This complete solution offers a fast, easy, and costeffective path to create innovative and differentiated location products.

Ericsson and China Mobile Perform TD-LTE Handover Ericsson and China Mobile Hong Kong performed seamless bidirectional handover between LTE FDD/TDD on a commercial chipset from Altair Semiconductor allowing operators to seamlessly offer mobile broadband services on FDD and TDD spectrum, increasing capacity and improving consumer experience. Interworking between LTE FDD/TDD in networks will be of increasing importance for the operators that have spectrums for both LTE modes. It will allow the operators to seamlessly offer mobile broadband services on FDD and TDD spectrums, increasing capacity and improving consumer experience.

Surajit Sen Joins EMC as Country Manager BRC EMC India has appointed Surajit Sen as the country manager of its Backup Recovery Systems (BRS) division in India & Saarc. In this role, Surajit will manage operations for the BRS unit work towards maximizing productivity, growth, and revenue course in India. The BRS unit is a key driver of EMC’s growth in the region in 2012. Surajit brings more than 17 years of leadership experience to the role, having held various positions in sales and sales management, product management and channel management, as well as in field of marketing. He joins EMC from NetApp India, where he headed channels, marketing, and alliances.

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‘Transition from IPv4 to IPv6 is a mammoth exercise’ data processing would benefit from the persistent addresses of IPv6.

Yves Poppe director, business development, IP strategy, Tata Communications Tata Communications recently moved to IPv6. Please brief us about it. We were involved in the early phases of IPv6 development and testing going back to 1996 and started upgrading our commercial network in 2003. We are the frontrunners to provide such IP solutions to our customers. Our core network provides native IPv6 capabilities to more than 44 locations worldwide. What advantages you expect in the near future from this transition at the backend as well as at the customer level? From a Tata Communications standpoint, we can see numerous advantages of IPv6 apart from faster internet, security, and its data carrying capability. It restores p2p (peer-to-peer) communication and has better QoS for flow labels as well as offer the option of IP address based billing. IPv6 neighbor discovery would also allow for many more hosts in the cloud which eliminates the need for ARP broadcast chatter. The rise of cloud computing would also lead to a rise in demand for off-site storage centers. Similarly, virtualization of data storage and

India has a close to negligible adoption of IPv6. Please Comment. Transition from IPv4 to IPv6 is a complex, mammoth, and long-term exercise during which both IPv4 and IPv6 will co-exist. For developing economies like India, there are organizations which will face difficulties and will not be able to switch to IPv6 network immediately. To adopt IPv6, various companies need to discuss, develop, and implement the strategies for making the transition to IPv6 possible. It is very important for our regulatory bodies and the government to conduct activities related to enlightenment, publicity, and education on IPv6 along with organizing training programs, workshops, conferences, and tutorials. What challenges are companies facing in the migration? While the IP is upgraded from IPv4 to IPv6, there are few apparent limitations. The challenges are primarily from a cost and infrastructure front. IPv4 is the largest running network in human history and the idea of abandoning it and moving to a new protocol is not only redundant but also futile. We need translators which will be able to communicate to both the different versions and help devices work through them seamlessly as the IPv6 platforms do not communicate easily with the IPv4 networks. A number of popular technologies like television, for instance, have been able to translate and render services from terrestrial data, satellite images or data transferred via cable. But translators for the IPv4-IPv6 are still expensive and one needs to incur additional capital towards making them affordable. Akanksha Singh akankshas@cyberemdia.co.in

24 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Wipro Builds Utility Computing Platform Wipro has created a global utility computing platform to meet the specific requirements of the enterprise clients by expanding its infrastructure as a service (IaaS) capabilities. Wipro is also expanding its services portfolio, which is deployed throughout the US, Europe, and India. The platform is drawn on Wipro’s global data center infrastructure and deep expertise managing mission-critical IT systems to deliver compute, storage, recovery, network, security, and other services in an automated consumption based model.

Agilent Appoints Sudhir Tangri as Country Manager Agilent Technologies India has appointed Sudhir Tangri as the new country manager for the Electronics Measurement Group (EMG). Prior to his appointment, Tangri was vice president and head of sales at Symphony Teleca.He brings 2 decades of strong sales and marketing experience in diverse disciplines of test and measurement, information technology and services, telecommunications, semiconductors, and electrical/ electronic manufacturing across leading companies such as Symphony Teleca, Aricent, Intel, and Tektronix.

BT Unveils App to Manage Roaming Calls British Telecom (BT) introduced an enterprise application ‘BT One Voice anywhere’ to manage roaming calls for the Asia Pacific region. This voice application service is delivered from the cloud and it is embedded in the enterprise grade VPN solution, resulting in no heavy upfront investments or on premise equipment required. The app has to be downloaded on Blackberry, iPhone, iPad, Android OS phone, and tablet devices. This service enables globally traveling employees to take telephony with via a ‘softphone’ and use speech to text voicemail translation.

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‘We are present in almost all the locations in India either directly or through distributors or dealers’ electronic products for IT, networking, and telecom industry. The existing manufacturing facility of 120,000 sq ft is located at Goa. At present, we have 2 SMT lines and we are looking at expanding our manufacturing capacities in the future. We are also looking for more EMS business.

Bimal Raj CEO, Smartlink Network Systems

How has DIGISOL performed in the first quarter of FY13? The first quarter of FY13 was good and we can say that we have started the financial year on a positive note. How has been DIGISOL’s performance in routing, switching, IP surveillance, and VoIP products? Which new products do you plan to add? We emerged as a strong player in the data switching market in India due to our endto-end solution offerings and got major wins in government and BFSI segment. In SOHO and home segment, we got a good mind share and market share for broadband routing. Last year we introduced IP surveillance products, with this we have offerings ranging from SOHO to enterprise segments. For home and SOHO users we will be introducing products in 3G and wireless category. The products are currently manufactured at the Goa facility. What are your plans for FY13? Smartlink Network Systems has over 17 years of experience in manufacturing of

What is the channel structure for the DIGISOL range of products? We are present in almost all the locations in India either directly or through distributors or dealers. We have a strong distribution network of 22 exclusive territory distributors, 400+ dealers, and 4,000+ resellers across the country and we have been working verly closely with these partners since the past 2 decades. Traditionally, ours was a strong regional distributor sales model and over the period we have upgraded skill levels of many of our business partners into system integration and solution/services offerings. The company is also distributing other brands. Which are those products and what plans do you have in this regard for FY13? Currently, we are the direct sales agent for Brocade products in India and we are also catering to customers using Brocade products for critical applications through service agreements signed with them. In terms of after-sales services, how are you positioned vis-a-vis your competitors? We are amongst very few IT companies which have its own service support division— DIGICARE, which gives us an edge over our competitors. DIGICARE has evolved most efficient, skilled, and professional state of service infrastructure. We currently have 64 support centers across India. Currently, we are serving many global as well as Indian brands under DIGICARE services. Pravin Prashant pravinp@cybermedia.co.in

26 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Cable TV Digitization Deadline Extends The government has extended cable TV digitization for 4 metros till October 31, 2012. Earlier, the installation of set-top boxes for 4 metros was planned to be completed by June 30, 2012. The Cable Television Networks (Regulation) Amendment Act, 2011 has made it mandatory for switchover of the existing analogue cable TV networks to digital addressable system (DAS) by December 2014, in a phased manner. In respect of the 4 metros of Delhi, Mumbai, Kolkata, and Chennai, the last date for digital switchover was June 30, 2012.

QSC Expands Carrier Ethernet Network Ciena, and AXIANS, the network integration and communications brand of VINCI Energies, collaborated with QSC, a German telecommunications operator has selected Ciena’s Carrier Ethernet Solutions (CES) for 2 major network projects. This agreement will expand QSC’s national wireless network including the introduction of several platforms from Ciena’s carrier ethernet solutions portfolio to rapidly roll out scalable, cost-effective ethernet business services to the operator’s enterprise customers. QSC will deploy Ciena’s carrier ethernet solutions including the 5305 service aggregation switch and 3940 service delivery switch to expand its network’s reach throughout Germany.

Asia Crosses 260 mn Broadband Connections According to Broadband Forum, the number of global broadband subscribers has soared to over 600 mn in the first quarter of 2012 and Asia continues to be the highest overall region with 262 mn subscribers. The region has added 8.5 mn subscribers at a growth rate of 3.4% in the quarter and 15.2% in the year. The 5 Asian countries in the top 20, together serve 239 mn broadband subscribers more than one-third of the global total.

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‘Extreme Networks will expand Indian engineering facility in August’

Chiradeep Rao regional director, India & Saarc, Extreme Networks What is the focus of Extreme Networks in India? For Extreme Networks, India is one of the top 3 prominent geographies in the APAC region, followed by China and Korea. The focus in India is not only on sales but also on design. In India, we have been working on education, public sector union, and media and animation sectors. We are refocusing on data center market, specific to enterprises. We have identified other potential areas, viz., oil and gas, infrastructure, physical security, and city surveillance. We strive to strengthen our existing business in India. We intend to get a bigger pie of the enterprise side, enhance our customers experiences, and better equip our sales force. We will expand our support capabilities from spares to warehouses and make our system robust. We will build on channel presence and help them to be more efficient. We also have plans to expand our engineering facility in Chennai in August and will recruit engineers. Out of the overall 650 employees of Extremes’, we already have 100 people in India.

What are the business drivers in the Indian networking market as it is a costsensitive market and most of the decisions are made outside India? True! but there are immense growing opportunities for Extreme Networks in India. Since 2008, there has been a significant shift where customers are looking at value for money. And there are 2 different concepts in this—the cost of ownership and the cost of acquisition. This has been favorable for us to a greater extent. Post–2008, customers are also now willing to be with a single vendor for a decade. And they are also keen to look at other OEMs if they bring more value for the same price. Moreover, our major focus is on India based corporates, Indian institutions, public sector, service providers, and not the MNCs as the decision making is by and large in India. With regard to cost-sensitivity, there is a combination of customers—customers who are completely price conscious, the other belt is the one who are concerned more on the value and feature requirements for a given price. These buying trends of this segment are not solely driven by price but are also driven by the value they get for that price. And our company is eyeing this market which require high-performance switches by virtue of the requirement. This is a market that we will make it happen. What is the contribution from the Indian R&D center in Chennai? Out of the total 250 engineers in Extreme Networks across the globe, Indian R&D center has over 100 engineers. The R&D activities include solution testing, engineering and coding, and end-to-end solution validation. It also does multi-casting work on Extreme XOS network operating system. For Indian customers, we do proof of concepts in this center. Malini N malinin@cybermedia.co.in

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Sprint to Launch LTE Services on July 15 Sprint CEO Dan Hesse has announced to launch 4G LTE services in cities of Atlanta, Dallas, Houston, Kansas City, and San Antonio on July 15. To better meet the growing voice and data demands of wireless customers, Sprint is building an all-new nationwide 3G and 4G LTE network through the Network Vision program. This means that whether a Sprint customer is using a smartphone to share a picture or to check the web, Sprint 4G LTE will make it faster. Coupling the speed of 4G LTE with the industry’s only truly unlimited data plan for smartphones makes Sprint the best choice in wireless.

Evergreen and Cisco Collaborate on Sustainable Cities Evergreen and Cisco have announced a collaborative relationship to explore innovations in urban sustainability. The effort with Cisco is the latest in Evergreen’s ongoing initiative to help in transforming communities and cities and make them more livable, economically competitive, and sustainable. As the world becomes more urbanized, there is a need to rethink and redesign cities to be smarter and more efficient, with less environmental consequences.

Aircel to Trial Next Generation Hotspots Aircel has signed up to do advanced trials of Next Generation Hotspots (NGH) which will give subscribers an easier access to a far greater number of public Wi-Fi access points around the world. This was announced by Wireless Broadband Alliance (WBA), the industry association focused on driving the next generation Wi-Fi experience. According to WBA, the trials will take place in Q4, 2012 and employ the first generation of Wi-Fi CERTIFIED Passpoint equipment, which the Wi-Fi Alliance announced it will start approving. The WBA expects the first NGH deployments to take place in H1, 2013.

Analysis

Reliance Infotel’s 4G Plans Multi-vendor and multi-technology complexities are forcing operators to move towards managed services Highlights  India lacks content to drive 4G 

   

eliance Industries, in 2010, through its acquisition of Himachal Futuristic Communications, Infotel signaled its entry into the mobile broadband telecommunications industry. For `4,800 crore Reliance Industries acquired a 95% stake in Infotel. RIL paid an additional `12,848 crore as license fee for a 20 MHz spectrum across 22 telecom circles. This bold, strategic investment gave RIL, through the new entity Reliance Infotel, a pan-India presence in the telecom sector. So, what should Reliance Infotel do with such a huge network, acquired after making very substantial investments? Unfortunately, telecommunication services haven’t done well in the India enterprise space so far. In spite of being the world’s second largest consumer mobile telephony market, enterprise services don’t measure up to the advancements made in the

former. The India market has witnessed limited traction for enterprise telecom services, offered by various operators.

The Issues Coming back to the issue as to what Reliance Infotel should do with its 4G network, as a first step they have the option of rolling out services for individual subscribers and/or enterprises. But, looking at the story of adoption of 3G services in the country so far, 4G is likely to follow the same route, at least in the individual subscriber space. Service offerings could either end up being priced out of reach at launch, making them unaffordable for the larger base of subscribers; additionally, availability of 4G-enabled smartphones and tablets would be a hindrance. So, for now, it may be ‘ok’ for Reliance Infotel to not launch any services directly targeted at individual subscribers. Even when introduced, the

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data services India video surveillance market expected to reach `3,565 crore by 2015 M2M modules market to reach `547 crore by 2015 Reliance group itself is a potential 4G user Reliance Infotel to focus on enterprises services To focus on enterprise services like video surveillance and M2M communications

volume of traffic generated by use of applications such as YouTube, etc, is not likely to provide sufficient growth impetus to a company of the size and scale of Reliance Infotel. Unfortunately, beyond Bollywood music/video clips and cricket, India still does not have enough indigenously generated, quality content to drive 4G data services growth.

The Options Reliance Infotel has the option of positioning itself as a BWA Internet Service Provider (ISP) across India wherein they could offer high speed broadband access through a CPE device that is shared by several users, say, a group of friends in a hostel, a cluster of apartments, etc. But for such a system to become popular and see high adoption rates, the individuals or families that make up a group need to display exceptional bond-

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Analysis

ing. Unfortunately, such arrangements have a history of not working very well in the long run. That is consumer behavior, for you! Further, the government is making this space increasingly complex by considering a bunch of programs together that could be potentially used for delivering the same set of services. Examples include a digital addressable system for TV, national optical fiber network, fiber to the panchayat, etc. All these are aimed at connecting homes and individuals to a digital network over which the government could launch digital inclusiveness and digital empowerment programs.

Research Statistics CyberMedia Research recently concluded studies in 2 relevant areas—India video surveillance market and India machineto-machine modules market. Although, these markets have very different dimensions and characteristics, both have some similarities as outlined below:  Devices are connected 24x7  Data needs to be transmitted in realtime, continuously  There cannot be any downtime, even for a fraction of a second  Data volumes are high, particularly in the case of surveillance  Networks span over a wide area

Security Concerns From the opportunity perspective both these markets are promising for Indian telcos. While, connected devices are closer to seeing adoption, monitoring infrastructure, public places, offices, urban commercial hubs, etc, is equally important with the persistent security concerns in the country. As the size and volume of physical infrastructure becomes increasingly widespread and complex, it throws up challenges in being monitored, maintained, and managed by direct human surveillance. Though, in terms of cost, physical human surveillance might still be a feasible option for a country like India, that may not necessarily translate into effective surveillance at all times.

Be it large enterprises, SMEs, or the ROBO 4G connectivity makes a strong business case for all As per CyberMedia Research findings, the India video surveillance market crossed the `1,000 crore mark in 2011 and is expected to reach `3,565.1 crore by 2015 at a CAGR of 34.5%. The India machine-to-machine (M2M) modules market, though still a niche opportunity, stood at `134.6 crore in 2011, and by 2015 it is expected to touch `546.9 crore at a CAGR of 32.3% The growth trends exhibited above clearly translate into a sizable opportunity for providing reliable, high speed broadband communication to serve both government/public sector and private enterprises by telcos. The key requirement is that the network serving these markets needs to be technologically robust and have wide reach and coverage. Reliance Infotel’s pan-India 4G network can easily serve as an ‘information highway’ for enterprises for effective video surveillance and M2M applications. Be it large enterprises, SMEs, or the ROBO (Remote Office-Branch Office) segments of the market, 4G connectivity makes a strong business and technology case for all such organizational user groups. For instance, for city-level surveillance it is necessary that we have a centralized control room at national, regional, and state levels. Any potential security threat needs coordinated efforts, sometimes at the national level. With a 4G based network for such a nation-wide surveillance system police/intelligence, civic and paramilitary agencies can work in a coordinated manner, greatly aided by an electronic ‘eye’ that surveys key urban centers, public places, and infrastructure facilities from a centralized base station.

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Such levels of integration of intelligent electronics systems at the national, regional, and state levels is very important to make the system useful and effective for users, traffic management/law enforcement forces, civic services providers, and highway development agencies. This is only possible by deploying a pan-India 4G services network. Similarly, enterprises need to have wide coverage, high speed networks that allow monitoring of remote physical infrastructure via video surveillance, and connectivity to customers in case of M2M communication applications. Another compelling reason for Reliance Infotel to launch such services over their pan-India 4G network is that the Reliance group itself could be a big potential user. With a diversified business portfolio and refineries, plants, offices, warehouses, and stores covering the length and breadth of the country, a 4Genabled video surveillance system could be a big multiplier in itself for increased operational efficiency and greater collaboration amongst business teams.

Conclusion As the market and the telecoms industry eagerly awaits for Reliance Infotel’s launch of 4G services, the challenges for Mukesh Ambani’s team will be similar as those faced by 3G service providers in the country in the last 24 months. Keeping that in mind, it makes eminent sense for Reliance Infotel to focus their energies on enterprise services like video surveillance and M2M communications. This will not only enable Reliance Infotel to have a sustainable, high speed data services business running on their 4G network, but also usher in a new era of enterprise telecom data services adoption in India. This mantle would truly befit the Reliance group’s philosophy of pioneering path-breaking products and services for the country. Faisal Kawoosa and Rajat Kharbanda The authors are with CyberMedia Research semiconductor and electronics practice vadmail@cybermedia.co.in

Roaming Services

Free Roaming — At What Cost? Free roaming across the 22 circles of the country is cited as one of the main policy reforms in the recent cabinet approved NTP 2012. What is the impact for subscribers?

Highlights  Domestic roaming contributes 6

to 8% of operators’ revenue

 Multi-SIM mobiles are reducing   



oaming is the ability of a subscriber from a particular network (referred to as Home network) to use the mobile phone of the same or different network provider (called as Roaming network) while moving to a different service area. A roaming agreement is needed between the networks that would enable exchange of information between these networks for authentication and billing purposes.

Intra vs Inter-circle Roaming Roaming can be intra-circle (say within Karnataka) or inter-circle (across Delhi and

Karnataka). In the former case, though the operator has license and associated spectrum in the circle, it might not have deployed the access network to enable coverage due to economic reasons and hence has an agreement with another operator who has deployed network in that area to allow roaming to subscribers. This method in general reduces duplication of network elements and allows optimal utilization of scarce spectrum amongst the operators. Intra-circle roaming has been allowed in India since June 2008 and is seen as an excellent example of competitive collaboration (aka co-opetition). For the user, it is almost

the relevance of roaming Free roaming is prevalent in advanced economies EU has been struggling with high data roaming Lack of 3G roaming regulation could be a matter of operator’s dispute Subscriber might end up paying more than current rate

seamless as there are no additional roaming charges levied. Though rollout obligations exist, the quality of service norms are not stringent enough to guarantee 100% subscriber coverage either through own infrastructure or via intra-circle roaming. It is time that the regulator mandates full coverage by operators especially in rural and remote parts of the country. However in case of inter-circle roaming, the operator does not have license and/or the associated spectrum to provide access services and hence has a contract with the roaming operator(s) to provide roaming services. There is often

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Roaming Services

an inter-operator wholesale reciprocal roaming agreement determined between operators and based on this retail roaming charges as paid by the subscribers are fixed. In the case of voice roaming, the Trai regulation implemented in 2007 ensured no rental or surcharges be levied by the operators. Trai has also regulated the maximum permissible per minute charges for roaming calls, irrespective of the terminating networks, and irrespective of tariff plans. These measures and the competition level in each circle have ensured that the retail roaming charges are closely aligned to cost of roaming. Domestic roaming still contributes to about 6-8% of the operatorsâ&#x20AC;&#x2122; revenue. There is every incentive for the operators to extract extra rents from subscribers if roaming charges are not regulated.

The inter-operator wholesale agreements should be much simpler wherein the roaming operator charges for all data usage of the roaming subscribers and passes it on to home operators for collections

Free Roaming However, innovations such as multi-SIM mobiles have also reduced the relevance of roaming. The user who often roams, typically has two SIMsâ&#x20AC;&#x201D;one from the home operator and another from an operator in the roaming circle to reduce the roaming charges to the bare minimum. Hence free roaming across circles already exists to some extent for voice calls, though policy has just now been announced, thanks to the general rule that regulation lags behind technologies and markets. It is to be noted that advanced countries such as USA, Australia, and Canada, have implemented free roaming within their countries for quite some time. In fact, EU has drawn-up a sliding rate plan to reduce voice roaming charges so as to make the difference between roaming and national tariffs to zero by year 2015. Though detailed guidelines are awaited on NTP 2012, the implications of free roaming in 3G and Broadband Wireless Access (BWA) for the provisioning of data and wireless internet services is worth exploring. EU has been struggling with very high data roaming charges across the EU countries and has set a goal of bringing down the data roaming charges from 90

cents per MB of data by July 2012 to 50 cents by July 2014. EU has also defined ceiling charges for wholesale rates, between two operators. Our handsets are smart enough to ask us whether we want to use data services while roaming across circles just to make sure that there are no bill shocks! With just two operators having pan-India spectrum for 3G and Broadband Wireless Access (BWA), will free roaming have an impact on the operators and on the subscribers? What is unique about data roaming is that usage is typically initiated by the subscriber (except in case of VoIP calls) unlike voice calls and also, the data packets are confined to roaming network and not routed through the home network.

Simple Agreements Needed Hence the inter-operator wholesale agreements should be much simpler wherein the roaming operator charges for all data usage of the roaming subscribers and passes it on to home operators for collections. Hence free data roaming (ie, without additional roaming surcharge) is easily implemented compared to free roaming of voice subscribers.

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However the operatorsâ&#x20AC;&#x2122; hands are tied with respect to appropriation of reciprocal inter-carrier wholesale roaming charges. This may possibly result in operators refusing to provide roaming. Hence the role of the regulator to curb such practices is vital as otherwise subscribers may wander with no network coverage.

Regulating Prices Research studies on this topic point out to the deployment of non-overlapping coverage networks and related spectrum and network sharing arrangements, if roaming charges are not regulated, as has been happening through 3G roaming pact amongst the operators and is the subject of dispute. In case of free roaming, the operators are likely to either (i) deploy networks since extra rent cannot be appropriated through roaming or (ii) increase the home usage charges to offset the wholesale roaming pacts. The former one is unlikely across circles as the operator has to purchase spectrum at high prices. Hence the latter is more likely. The subscriber will end up paying more than current rates across the board! There is another possibility which is a silver lining to this whole episode. It is very likely that both the home as well as roaming operators, by themselves, or by tying up with Internet Service Providers (ISPs) provide Wi-Fi (the wireless network operating over unlicensed band) hotspot access at substantially reduced usage charges to address the requirements of roaming data users. This should be good news for business savvy niche and nimble ISPs to take note of and improve Wi-Fi hotspots penetration in our country! Dr V Sridhar and G Krishna Kumar The authors are research fellow, Sasken Communication Technologies and vice president, Symphony Teleca, respectively. vadmail@cybermedia.co.in (Views are personal)

Policy

Will the Telecom Spectacle Continue? Government should promote policies that enhance access and usage. Revenue will automatically come in Highlights  At less than `3,000 per year

for telephone subscribers, the annual spend is 1/21th of the PCI  The entry of BSNL into mobile telephone services marked the end of its monopoly over national and international long distance services  Rural networks are capitalintensive and low-revenue yielding. The spectrum cost should therefore be not high

he benefits of India’s liberalization of economy and industry in 1991-92 are to the greatest extent experienced in the telecom and IT sector. In 1994, for 100 people we had one telephone. People had to wait for several years. The waiting list was ever growing and so was the frustration both for those who applied but not got the phone and those who have a telephone but were served very poorly. The National Telecom Policy (NTP) of 1994 opened the sector for private investment and competitive provision of services. The distortions in the initial scheme of licensing were boldly rectified by the new NTP of 1999, which migrated the private telephone companies (p-telcos) from heavy upfront license fee payment scheme to revenue sharing. Soon enough, the DoT/services were corporatized and

we had state-owned companies like MTNL and BSNL competing with the p-telcos. The entry of BSNL into mobile telephone services also marked the end of its monopoly over national and international long distance services.

Affordability and Availability The full scale competition brought down the prices phenomenally. The affordability and the availability increased spectacularly. In 1994, the average annual spend for telephone service by a subscriber was `10,000, exactly equal to the year’s per capita income (PCI) of an Indian. Now, at less than `3,000 per year for telephone subscribers, the annual spend is 1/21th of the PCI. That is the reason why even the NREGA laborer has a cell phone. The price of the telephone instrument has come down to 1/15th of what it was before

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full-scale competition. At the peak rate of growth, we were adding 15 to 18 mn telephones every month. With over 900 mn telephones our teledensity now is over 80 phones per 100 people compared to just 1 in 1994. Telecoms have been transformed into an electronic-photonic high-way infrastructure for storage, transmission, and exchange of electronified information as in telephony, fax, data, and video. This happy transformation led to the growth of the internet and for various schemes of e-governance. Telecoms are now totally a sub-set of IT which sustains the infrastructure comprising of terrestrial and satellite radio, underground and undersea, optical fiber cable transmission systems, and the communications networks. The processing of all information, its storage , transmission, and exchange is all computer based.

The Sourceâ&#x20AC;&#x201D;Internet Internet has become the repository of all knowledge that we have accumulated and that we are creating. The hundreds of millions of websites are electronically storing information and all that information is accessible to anybody, anywhere in the world, at any time through appropriate access devices like the cell phone, the PC, laptop, iPhone, etc. Books are now available in electronic form and there are electronic book readers like Kindle. For the first time in the history of mankind, democratization of knowledge has become possible in a way that it is available to everyone, who can access the internet. This happy situation appears to be in for a damage by the recommendation of Trai for auctioning the 2G spectrum. It recommended a reserve price of over `18,000 crore for 5 MHz for pan-India foot-print . This is 10 times what it was in 2008. And if it is put to auction as ruled by the supreme court the gamblers might hike this at least by 5 times to `90,000

crore. This amount will cost the telephone companies and they will pass the burden to the consumers. The urban demand is almost completely met at a teledensity of 85 rural density is under 40 phones per hundred people. Rural networks are capital-intensive and low-revenue yielding. The spectrum cost should therefore be not high. The happy situation of a NREGA laborer affording the cell phone service may be imperiled if the greed for garnering money somehow, especially through gamblersâ&#x20AC;&#x2122; auction over-rides the social principle of equity and affordable access to services which science and technology are making possible for mankind.

The Right Decision Government should take a wise and pragmatic decision in the interest of the continuance of affordability of telephone service for the total population. Cell phones are becoming more and more intelligent and multi-functional and at the same time, their prices are also coming down because of the mass

market. Through the cell phone, even not so educated rural people, are able to utilize the e-sevas (for example: Railway ticketing and reservation, money transfers, welfare entitlements, purchase of books, and subscription to journals and magazine). For these benefits and many more to be available to all population, prices should be affordable. Therefore costs to the providers, ie, telcos should not be increased. More people using more services will bring in more revenues to the companies. The various takes of the government together amount to over 30% of what the users are paying to the companies. This alone will amount to about `75,000 crore every year at the current level of users and usage. If these are promoted and facilitated, the take by government will automatically increase. Not greed but public good should prevail. Dr TH Chowdary The author is former CMD, VSNL vadmail@cybermedia.co.in

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LTE

LTE Networks:

Service and Efficiency Consumers have great expectations from the LTE service providers and are expecting high Quality of Service (QoS) to get better experience Highlights  The economic realities and physical

limitations of available spectrum prevent operators from simply adding more and more network capacity  Granular control of service quality is critical for operators to establish new business models and monetize services  Project (3GPP)—the Universal Mobile Telecommunications System (UMTS) and Long-term Evolution (LTE) standards body—have developed a comprehensive QoS, charging, and policy control framework to address this problem

he Indian telecom industry and consumers are all excited about the launch of LTE networks to fuel the ever-increasing need for higher feeds and speeds. The growing need for broadband networks is due to the multitude of work, fun, and socialization available on the network. The consumers have great expectations from the LTE service providers and are expecting high Quality of Service (QoS) to get better experience. At the same time, the Indian consumer, in particular, is value conscious and expects the prices to be affordable which keep coming down in order for more consumption at the same price. India’s largest telecom operator, airtel, recently slashed its 3G data plan rates by up

to 70%—a move that may change market dynamics. This is widely expected to be followed by other operators, and by the time this article is read, many more operators would have slashed down the prices. However QoS will be the key parameter in increasing the stickiness of customers to its network, make them use more and more innovative services over the network, and at the same time ensure new customers are added.

Limitations of Adding Network Capacity The economic realities and physical limitations of available spectrum prevent operators from simply adding more and more network capacity. To keep their investors happy, operators will be pushed to

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maximize the revenue from their services. New business models and more premium services will be adopted to achieve this as penetration rates increase and increase in returns rather than customer acquisition become the norm for growth. In turn, as subscribers receive more services, their expectations of acceptable network availability and quality will intensify. A positive user experience will have to be maintained through efficient partitioning of the available wireless network resources. This will ensure more and more consumers stay on the network and churn is limited. In this regard, the industry has already been working to develop industry standards. The 3rd Generation Partnership Project (3GPP)—the Universal Mobile

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LTE

Telecommunications System (UMTS) and Long-term Evolution (LTE) standards bodyâ&#x20AC;&#x201D;have developed a comprehensive QoS, charging, and policy control framework to address this problem. The 3GPPâ&#x20AC;&#x2122;s goal is to define an access agnostic policy control framework, with the objective of standardizing QoS and policy mechanisms for multi-vendor deployments that enable operators to provide service and subscriber differentiation. The policy and charging control (PCC) is the heart of the Evolved Packet Core (EPC), and ensures user Quality of Experience for a particular subscription and service type. Granular control of service quality is critical for operators to establish new business models and monetize services. It enables operators to employ fair policies that limit subscriber service abuse (eg, bandwidth hogs such as file sharing), and maintains network performance during peak traffic times. Before spending billions of dollars on equipment and deployments, forward thinking operators will carefully evaluate vendors and proactively measure the QoS and policy management functions of their network. Validating mobile data service quality requires saturating the network with a high load of real-world mobile subscriber traffic, and measuring key performance indicators (KPIs) that identify QoE. Policy management is critical in 3 closely-related areas, such as limiting network congestion; enhancing service quality, and monetizing services. It plays a fundamental role in implementing QoS in mobile broadband. Policy management is the process of applying operator defined rules for resource allocation and network use.

Using QoS and Policy Management Mobile operators are aware that radio spectrum is finite, and gains from improved spectrum efficiency can only go so far. Even if operators significantly increase capacity, bandwidth-hungry applications such as peer-to-peer (P2P) services and video will eventually consume any excess capacity. Providing high service quality by over-

Providing high service quality by overprovisioning network capacity will eventually leave the operator at a competitive disadvantage to providers that offer the same or better QoS, at a lower cost provisioning network capacity will eventually leave the operator at a competitive disadvantage to providers that offer the same or better QoS, at a lower cost. A solid policy strategy maintains network performance during peak traffic times and spikes in user demand, saving the operator from having to carry excess capacity. With proactive management policies, combined with other strategies such as network offloading and demand calibration, mobile broadband networks with finite resources can better satisfy consumersâ&#x20AC;&#x2122; demand for multi-play services. Policy management differentiates services (applications) and subscriber types, and then controls the QoE of each type. Policy management can also be taken a step further towards the creation of new business models by offering tiered service levels. Tiered service levels can guarantee superior performance and quality to higher paying subscribers (such as corporate accounts).

Phasing-in Policy Management Operators will likely take a phased approach in adding policy management to their networks and starting with congestion reduction for applications such as P2P services. Aggregate-level policy will

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probably also be introduced in the first phases. It is unlikely that per subscriber policy management will be implemented early due to its high complexity. However as the technology matures, traffic congestion increases, and competitive pressures mount, QoS and policy management will become more and more important.

Service Quality Validation Through network upgrades, operators aim to increase capacities and improve network performance to attract more subscribers, maximize the average revenue per unit (ARPU), and reduce subscriber churn through increased customer satisfaction at the lowest possible cost. To achieve these goals, operators must carefully evaluate the capacity and performance capabilities of the products they are considering for deployment. After the vendor selection, network designs should be prototyped in the lab prior to deployments. As new hardware, firmware, or services are introduced, they should be thoroughly evaluated for performance and it must be verified that they do not negatively impact the performance of existing network services. Service quality validation allows operators to evaluate networking devices, and proactively measure their QoS and policy management functions. Fundamental strategy is to test the mobile data network with the traffic types and traffic mixes that most closely resemble the real services that operators will deploy. Comprehensive service quality validation arms network equipment manufacturers (NEMs) and operators with a solid method to quickly evaluate the quality and performance of devices and networks. Operators must plan today for the future evolution of the network, which means working with vendors that have a solid roadmap for QoS and policy mechanisms in their products. Joseph Zeto The author is the senior market development manager, Ixia vadmail@cybermedia.co.in

IPv6

What Enterprises Should Do about IPv6 Guidance on how IPv6 should be included in network design, planning, and operations Highlights  The industry today is on the verge

of running out of IPv4 addresses  IPv4 address exhaustion will have a major impact on the growth of the internet  IPv6 is a new version of IP which is a natural complement to IPv4 and is all set to tackle the issue of IP exhaustion  IPv6 is ready to be deployed today and most organizations are already undertaking the transition

he internet has been a rapidly growing communications medium for a few years now. With the rapid growth of the internet over the last decade and more, the industry today is on the verge of running out of IPv4 addresses used to number devices on the internet. The last block of IPv4 addresses to be given to an internet service provider (ISP) is projected to happen in late 2012/2013. This means, the internet will continue to function as it does today, but new public IPv4 addresses will be scarce, available only when they have been recovered from previous use. IPv4 address exhaustion will have a major impact on the growth of the internet, internet service providers (ISP), and

internet presence (websites, e-commerce, email). Any ISP that wishes to continue to grow revenue by increasing its customer base will have to find a technique to add new internet users. Transition to IPv6 seems to be a viable option. While many enterprises have enough address space (public or private) to manage their intranet needs for the coming few years, the length of time needed to transition to IPv6 demands that administrators and managers consider the issue well in advance, because large enterprises may need to act sooner rather than later to ensure sufficient enterprise connectivity. The transition to IPv6 helps businesses prevent increased cost, disruption to website services in the long run and facilitates

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the growth of global business. By transitioning to IPv6, businesses can also avoid diminishing experience to their customers and have access to the supply chain. IPv6 is ready to be deployed today and most organizations are already undertaking the transition. IPv6 is a new version of IP which is a natural complement to IPv4 and is all set to tackle the issue of IP exhaustion. It can be installed as a normal software upgrade in internet devices and is interoperable with the current IPv4. Its deployment strategy is designed to not have any flag days or other dependencies. IPv6 is designed to run well on high performance networks (eg, Gigabit Ethernet, OC-12, ATM, etc) and at the same time still be efficient for low bandwidth networks (eg,

IPv6

wireless). In addition, it provides a platform for new internet functionality that will be required in the near future.

From IPv4 to IPv6 IPv4 and IPv6 are not compatible but they can use the same network simultaneously. Some options for integration and coexistence of IPv4/IPv6 include:  Dual Stack: All internet users are given both a routable IPv4 and a routable IPv6 address (actually a network prefix). It is then up to the user’s computer to select which address to use. However this technique cannot be applied to all current and future internet users because enough free IPv4 address blocks will not be available in future.  Shared IPv4 Address: The ISP shares a few globally routable IPv4 addresses among several customers. Each customer is assigned an IPv4 address used only within the ISP network. If a customer wants to access the internet then the customer packets will go through a Network Address Translation (NAT) device within the ISP network. The ISP can also provide IPv6 connectivity at the same time.  IPv6 Only: The ISP does not give any IPv4 internet access to the customer. The customer will have access only to the IPv6 part of the internet. Mobile operators in some countries intend to offer this connection on next-generation mobile handsets (LTE). The service providers are likely to implement any of these 3 approaches over the short to medium term.

What Enterprises Ask For enterprises, the IPv6 transition needs to be low-cost and low-risk and needs to co-exist with the existing IPv4 infrastructure. While in transition, businesses must still be able to access public IPv4 internet, the integration should be seamless and must not impact the existing services. IPv6 must be incrementally deployable and include the cost of adding new services. Most importantly, it should not be easily apparent whether IPv4 or IPv6 is being used. While transitioning from IPv4 to IPv6, enterprises have some questions on deploying IPv6. They include:

For enterprises, the IPv6 transition needs to be lowcost and lowrisk and needs to co-exist with the existing IPv4 infrastructure Are there any regulations or incentives that require or encourage either the enterprise or its customer base to migrate to IPv6?  Are there any customers or business partners who would not have access to IPv4 services?  Are there any applications that would be severely affected if the internet users are located behind a shared IPv4 address?  Is there any performance or resiliency benefit either to adding IPv6 or to staying with IPv4?  Is a unique identifier (like an IP address) important for the service?  Are IPv4 address literals being used by the service (eg, http://192.0.2.1 in HTML pages)? The answer to each of these questions is likely to be volatile and requires reconsideration from time to time. For instance, at this moment, there are likely few, if any, enterprises that are unable to get IPv4 addresses. Even if that changes, the vast majority of customers who cannot get unique IPv4 addresses will still have access to the IPv4 internet through some form of NAT. This will be sufficient for simple web page access for some time to come. Direct IPv6 connectivity may be preferable for other more advanced services. It is also entirely feasible to deploy IPv6 today and possibly see a drop in performance for dual-stack clients, depend

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ing on how clients order their connection attempts as well as the quality of the IPv6 network connection between the clients and the enterprise online services. As service and content providers deploy IPv6, this problem is anticipated to dissipate.

The Transition While ISPs are mainly concerned with IPv4 address exhaustion, enterprises should assess their exposure to IPv6. Enterprises must understand the impact of the ‘new internet’ on their services, assess their own situations and requirements as early as possible; this includes network, security, and business applications. For a successful IPv6 adoption, businesses should start with a phased plan aligned with their business strategy and identify the highest priority IPv6-critical areas in the network. They should then perform IPv6 assessment on high priority areas to determine scope and develop a design that enables IPv6 without disrupting the IPv4 network. They must also test and implement in pilot mode, then extend it over time into production. It is quite possible that regulations and mandates will enforce the use of IPv6 but there are many other reasons for enterprises to move to IPv6: Security, new application support, getting rid of NAT, easier network deployment, providing IPv6-only services to internet newcomers, being ready for the future. It is expected that for most enterprises adding IPv6 connectivity, internet presence will be the highest priority because enterprises must offer services and content to their IPv6 customers over the internet. This is also the easiest part. Providing IPv6 access to all internal users and applications is probably the next step especially if the enterprises move to the cloud computing paradigm or to web services. The last step will probably be adding IPv6 in the intranet and in the data center applications. This will take longer as there is a clear impact on the business applications. Lalit S Chowdhary The author is senior vice president, system engineering, Cisco India and Saarc vadmail@cybermedia.co.in

Interview of the Month

Sunil Dutt joined RIM India when the Canadian company was in trouble, both internationally and in the domestic market. Before joining RIM, Dutt had proved his mettle in companies like Samsung and HP, and is regarded as the man who stabilized Samsung in India. Though the smartphone maker has been doing good business in India, there are still many issues to be tackled here, and a lot is expected from him. In a no-holds-barred discussion with VOICE&DATA, he talks about his plan for the company, issues plaguing the Indian telecom industry, and many more. Excerpts—

—�� Sunil Dutt �� MD, RIM India�

‘Today customers are neither too upset nor very happy with their operators’

ou have completed almost 6 months with BlackBerry in India, especially at a time when the going, internationally, has been rather tough. How has it been so far? After taking charge, I put a lot of focus on knowing my team in India and inter-

acting with them, and with colleagues at the APAC and global level. The idea was to understand the organization and its expectations from me as in depth as possible. In fact, for the first time ever, we organized an all India meet of RIM staff to chart out an India strategy. This meet did a very critical thing. One, it gave every

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employee a sense of contribution towards building the organization, and an idea of the role other employees were playing. More importantly, it gave team members a sense of how the big picture will not be completed unless every individual achieved his or her goal. It brought the whole team together.

What is surprising is that BlackBerry is becoming popular among school and college kids, whereas one thought it was a device for senior executives... It will be incorrect to assume that BlackBerry is for working professionals only. Students are using it not for jokes and songs, but to form groups where class assignments and lectures are uploaded for the benefit of those who were absent. Students come together on their BBM group work and jointly work on solving difficult problems. So it is not just the CEOs who are using BlackBerry to run their office, but students find it equally useful. Are you saying that BlackBerry is not a high-end premium product anymore, it is for everyone? No, BlackBerry is a premium product because it is a smartphone which starts at a particular price point. And we want to maintain the aspirational value of BlackBerry. We have a huge number of CEOs and top and senior management users so it is a phone people aspire to have. But now, we also have a huge number of next-level users for whom productivity and efficient communication matters. Similarly for youth and students, who want to be connected and want to collaborate. So BlackBerry is an aspiration device in all the key segments. That is how it is being positioned. We don’t want to dilute that position or compete at the entry level. But aren’t several other smartphone players also offering features which were only available with BlackBerry in terms of push mail, messenger, security, etc? There will be phones available which have some BlackBerry features, or some of them may be better, but then remember that the consumer wants the complete experience to be great and not just one or two features. They are going for BlackBerry because the total experience they get out of using BlackBerry is far more than a specific feature experience. As a complete package, BlackBerry offers much more and that is why it has such a high popularity.

Let me first begin by informing you that from 4,000 BlackBerry developers 2 years ago, this community is now 40,000 big in India Did RIM slip up on innovation for some time because it was content with its growth and market share? Our users’ strength is the QWERTY experience and we want to build up on that. We started with QWERTY and then moved to QWERTY plus touch to only touch now. And in that, we have given users the best options and features. We are in touch with market realities and expectations, which is essential for innovation. That is why we now have models with FM radio, dedicated BBM key, local language, and longer battery life. We have been listening to our users and innovating all along. We don’t launch 40 models in a year, but give our users longer lasting products that can be owned for quite some time. Does this mean that you need to increase your reach and spread? We are already in 250 cities and towns and want to be there in 350 locations soon. A full plan is being put in place for this. We are also setting up new service centers. We want to reach all those towns and outlets where our potential users are. We are also making town-level plans. While there are questions being raised about challenges that RIM is facing the world over, how confident are you about India growth? The smartphone growth in India is in the 40-60% range, so I am confident that we would grow at least that much or more. That is our target.

What is that one target or vision that Sunil Dutt has for India? To be the brand of desire and aspiration that provides relevant solutions through our technology, our products and services levels to our customers, our distribution partners, our stake holders, and our employees. Our vision is to be seen as a technology leader and to be able to this in transparent, ethical, and efficient way. Today, especially for telecom companies, a big robust ecosystem that keeps enlarging and enriching the basket of offerings is critical. Where is RIM in that? Let me first begin by informing you that from 4,000 BlackBerry developers 2 years ago, this community is now 40,000 big in India. These are in the areas of enterprise and SMB apps for healthcare, mobile governance, education, financial solutions, media, and so on. For the consumer category, we have over 70,000 apps available. And these are all on the cloud. We have recently opened an innovation center in Cochin. The idea is to offer our customers apps that enhance their knowledge, productivity, efficiency, or provides entertainment. And with BB 10 coming in, this ecosystem will be strengthened even further because of the flexibility it provides to the developers as well as the customers. With our range of products and services, the focus is on data management, security, and productivity, the ecosystem also grows. The developers as well as the carriers have realized that BlackBerry drives data revenues so they want to be a part of it. They now realize that BlackBerry is being adopted not just by elite but also by masses, so the opportunities are huge. How do you see enterprise mobility picking up in India? Today, I believe that every CEO and his CIO is concerned and bothered about enterprise mobility, but India is still in its very early stage of adoption. Also, since we have very few postpaid users, capex investments for mobility, especially on devices, is not high on enterprise priority. Also, the BYOD phenomenon is catching up but there is a security concern.

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Interview of the Month

From BlackBerry, we offer solutions that address these needs, whether for multiple device management on the network, or security, or reducing costs by features like connecting desk phone to mobile phone. But there is a lot of action happening, though it might not be very visible. How do you view BYODâ&#x20AC;&#x201D;a threat or as an opportunity? One has to accept that BYOD is a reality, but you have to be relevant to your customers too. The good thing about BlackBerry is that it is strongly positioned and perceived as a device for work as well as play. It provides a seamless experience between work and play. So if we can effectively convey and communicate this message to the users and convince the CIOs that BlackBerry will manage your network, ensure security, and bring costs down, BYOD is an opportunity for us. We are by far way ahead of all our competitors put together in terms of the number of enterprises who are running on our mobility solution. Here we have got great support from our carriers and VAS partners. On a slightly different note, has the RIM security and server location issue with the Government of India been sorted out? It was something which unnecessarily became an issue. Actually it was an industry issue but became a RIM issue that was blown out of proportion. The solution that the government had asked us has been delivered by us, and the government is satisfied. Now in order to have the final solution to start working, there are other components in the infrastructure that will have to come in place. See, we also believe in the law of the land and that lawful interception is required. Government and industry will have to work together on this. Are you happy and satisfied with the role that the operators are playing in terms of enterprise mobility solutions? In my last 10 years that I have been involved with mobility brands, my interaction and experience with operators

We are by far way ahead of all our competitors put together in terms of the number of enterprises who are running on our mobility solution has been excellent. The key is to find the common ground on which you can progress together. It is important to be very candid and upfront with each other so that the right mutual expectations are set right in the beginning. Over the last few years, I have seen operatorâ&#x20AC;&#x2122;s focus shift from customer acquisition to driving value addition for the customer. As a result of that, our working together has become stronger again. So, has that resulted in some change in the revenue share with operators? Are you getting more out of the operators now? So far no, but we are working together on that. We realize that as markets progress, certain changes have to be made. What is happening on the Playbook front? After the initial launch which failed to excite people in India, there seems to be complete silence. Once we corrected the price for India, we launched it as a festival offer. The response was so overwhelming that we repeated the offer. Our bookings have gone through the roof and the situation is that whatever numbers we get just fly-off from the shelves. There is a huge demand which we are unable to fulfill and are trying to catch up. We are working very silently on this. Surprisingly, there is demand from enterprises for our Playbook

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and we are getting orders in 30s and 40s from enterprises. How do you view the cancellation of 2G licenses? I think the good thing is that this lesson will make the industry very cautious and careful. This will make the industry more transparent and when that happens, it will be good news for customers as well as the country. I am sure this will make the government and the industry more transparent and process oriented. After the rapid, mind boggling mobile growth that we saw in terms of monthly additions, we seem to have slowed down and stabilized. What do think is going to be the trigger for the next growth wave? This question really makes me think. I am not a disbeliever in the next growth wave, but I want to think about it rationally. Out of the 12 bn population of India, about 800 mn is rural. Out of that 800 mn in rural areas, about 400 mn would be women. Out of that 400 mn, roughly 200 mn would be above 18 years of age, and 200 mn would be under 18 years. Now if 50% in each group own a phone, it means 200 mn women in rural India will have a phone. Similarly among the menfolk in rural areas, this percentage will be a bit higher and we will have about 250 mn people with phone. So we have about 350 mn in rural areas who do not own a phone. Then there are about 100 mn people in the destitute category who find it difficult to have one square meal a day and they do not own a phone. So that is about 450 mn in the country who do not have a phone. In other words, there are about 750 mn people who can own a phone. And we are not very far from reaching that number. For the remaining 450 mn, there has to be an even stronger reason that is currently before them to buy a phone. We will need to connect with them, find out what will motivate them to use a phone to get to the answers. Ibrahim Ahmad ibrahima@cybermedia.co.in

emerging

technologies M-Commerce . ..................................................................................................50 FTTH......................................................................................................................51 Reality Mining ................................................................................................52 Mobile and Cloud Convergence.............................................................54 M2M......................................................................................................................55 SOFTWARE DEFINED NETWORKING...............................................................56

Emerging Tech M-COMMERCE

A Long Way to Go!

Highlights  Banks, telecom operators, and

technology providers should offer clear and confident assurance on security  According to a recent survey by eBay India, 94% of Indian smartphone users access internet on mobile  M-commerce reach is minuscule at present  LBS and NFC will complement and boost efficiency of m-commerce

M-commerce is leveraging on e-commerce in India but its reach is minuscule at present

he high penetration of mobile communications in India has enhanced business opportunities while parallelly providing huge convenience to consumers. And one such significant business opportunity is mobile commerce (m-commerce). E-commerce companies had to await for a decade for it to take off but m-commerce is moving at a faster pace. Although m-commerce in India is still nascent—despite its potential, efficiency, and flexibility—it is more likely to grow faster than e-commerce. But the ecosystem should nurture and push it.

Nurturing M-commerce There are hardly any journeys without hurdles, so is the case with m-commerce. Communication, education, and security are the top most crucial elements for the widespread adoption of m-commerce in India. According to a report by BuzzCity, 35% of mobile users are unaware of the basic mobile transactions available on phone. M-commerce in India is primarily dependent on network operators, they have to effectively enhance and advance the usage of its services, which has resulted in collaboration and partnership models in domains like banks, telecom operators, and technology providers. The market expansion in this domain has to be

nurtured, offering a wide scope in increasing revenue for m-commerce players and telecom operators. Banks, telecom operators, and technology providers should offer clear and unambiguous assurances about security. Location Based Services (LBS) is a blessing to m-commerce particularly retailers as it enables them to engage their clients based on location. Near Field Communication (NFC) will revolutionize m-commerce. But LBS and NFC is yet to gain traction in India; it will complement and boost efficiency of m-commerce. Applications and services must evolve for its success.

Push for M-commerce in India According to a recent survey by eBay India, 94% of Indian smartphone users access internet on mobile. The survey highlighted that shopping is the third most popular category among mobile internet users after email and social networking. Regulators in India like Reserve Bank of India and Telecom Regulators Association of India, several banks, mobile service providers, and handset manufactures have come together to leverage m-commerce and take it to the ‘unbanked’ population. Mobile handset manufacturers are manufacturing WAP-enabled

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smartphones and are offering wireless internet to drive m-commerce. Reserve Bank of India approved mobile payment for merchant transactions—the proposal to extend payment facility was put forth by National Payment Corporation of India (NPCI). NPCI rolled out pilot projects with 6 banks, viz ICICI Bank, Union Bank of India, State Bank of India, Canara Bank, Standard Chartered Bank, and Kotak Mahindra Bank. In May 2011, the RBI relaxed the norms for making payment through mobile phones, it has increased the limit of virtual money a user can load on a cell phone to `50,000 from `5,000. OnMobile Global intends to offer customers the options of topping up prepaid accounts of a limited number of people. A few banks in India have already begun to tap this market—ICICI Bank has started providing internet banking services on mobile phones and Standard Chartered Bank lets its customers transfer money across the country from an ATM to anyone with a mobile group. Bharti airtel has inked a deal with State Bank of India. Comviva is on the verge of providing solutions for microfinance operations especially in data collection work. With a surging 900 mn subscribers in India, m-commerce’s reach is minuscule at present. It has a very long way to go and it is just a matter of time before it takes off.

Emerging Tech FTTH

For the Ultimate Experience Optical fiber access method is gaining significant attention as it delivers services to the consumers’ premises Highlights  FTTH is proving to be one of the

ideal technologies to facilitate broadband converged network  Although netizens are willing to pay for FTTH, reduced prices will gain traction in India.  Technology advancements in the area of WDM will refine and enhance the technology  As on 2011, there are about 28,000 subscribers using fiber broadband services across the country

n the world of digitization the need for internet and bandwidth is growing. Consumers are demanding higher bandwidth due to the growing needs for bandwidth-hungry applications such as multi-media, video streaming, e-commerce, etc. In recent years the optical fiber access method has gained significant attention amongst the various access technologies as it delivers services to the consumers’ premises. Fiber-to-the-home (FTTH) is proving to be one of the ideal technologies to facilitate broadband converged network. It can deliver far greater bandwidth than Digital Subscriber Line (DSL) or cable solutions. It will surely enhance consumers’ experience on internet, HDTV, 3DTV, video-on-demand, and internet-on-demand. Today’s netizens are ready to pay for the broadband access and they are demanding better bandwidth. FTTH provides enormous bandwidth and long reach, offering triple play services including data, voice, and video. FTTH offers triple play services with data speeds ranging from 155 Mbps to 2.5 Gbps downstream (Network to User) and 155 Mbps to 1

Gbps upstream (User to Network) range of services due to high bandwidth. The capacity to meet these demands will offer revenue potential. Service providers who are able to offer these services to an ever growing customer base can double or even triple their revenue in a short period of time. As a result, the demand for fiber technology such as FTTH is on the rise. Technology advancements in the area of WDM are expected to further refine and enhance the technology, enabling more service providers to justify the investments in FTTH.

FTTH Adoption in India As on December 2011, there are about 28,000 subscribers using fiber broadband services across the country, said a report from ABI Research. The average broadband speed in India is around 256 kbps and in some cities with the deployment of copper lines it is 512 kbps. This bandwidth hardly supports VoIP, video-on-demand, IPTV, and other applications. FTTH will be driven by the need for such services. In India, the first FTTH project was launched jointly by Ericsson and Ra-

dius Infratel in December 2008 in ATS Paradisso, a large residential complex in Greater Noida. All the residential units of the housing complex are connected with fiber optics and associated fiber optic equipment. Jaipur and Vadodara also have been given access to FTTH technology. Cost factor is a barrier for the rapid adoption of FTTH technology in India. However the cost can be lowered by complying with standards compatibility and by designing equipment for interoperability. BSNL is offering FTTH network on Gigabyte Passive Technology (GPON) concept in Hyderabad, Jaipur, Vododara, Bengaluru, Patna, etc. In 2010-11, it has demonstrated to nearly 63 large enterprises including Bharat Heavy Electricals (BHEL) and the State Bank of India. FTTH is expensive now like any other new technology. The cost of it is higher than the regular broadband as service providers intend to recover the cost of infrastructure. Although netizens are willing to pay for FTTH yet with the reduction of prices, FTTH will gain huge traction in India.

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Emerging Tech Reality Mining

Mobile Phones Don’t Lie!

Mobile technology has tremendous potential in comprehending the pattern of human life by analyzing digital traces Highlights  Reality mining has the potential

to diagnose health issues  Safeguarding the privacy of people and organizations’ legitimate competitive interests are crucial  Cell phones and smartphones can continuously monitor person’s motor activity, social interactions, sleep patterns, and other health indicators

ou are well aware of an adage, ‘Tell me who your friends are and I will tell you who you are,’ this can be slightly tweaked as ‘Tell me your mobile number and I will tell you who you are,’ in this digital world. Do you deny that mobile offers extensive information about our lives both individually and collectively? This mobile technology has tremendous potential to comprehend the pattern of human life, in understanding of ourselves, organizations and society, and by analyzing digital traces through sensors in mobile phones, cars, security cameras, RFID readers, GPS technology, etc. And this is termed as ‘Reality Mining.’ Reality Mining is defined as the ‘collection and analysis of machine sensed environmental data pertaining to human social behavior in order to identify predictable patterns of behavior.’ Massachusetts Institute of technology’s (MIT) media labs revealed reality mining in one of its largest mobile phone projects that was attempted in academia. It can provide accurate information about what people do, where they hang out or travel, and with whom they communicate from the device. It has the potential to map social

networks automatically and discover people with different behavior patterns. Reality mining of behavioral data is just beginning. Cell phones and smartphones can continuously monitor person’s motor activity, social interactions, sleep patterns, and other health indicators as well.

Opportunities Reality mining can be a great tool to track terrorists as mobile phone networks can identify unusual patterns of movement and communication. GPS-enabled mobile phones and tracking devices are installed on commercial vehicles to monitor traffic conditions. It facilitates in tracking of realtime traffic congestion data. Businesses can leverage the data to be more profitable as the phone can gather data on spending patterns. It can help companies to boost inter-office cooperation. Event planners who manage multi-million dollar conventions and conferences can avail the data and make the best out of it. Telecom companies can analyze the service usage and can enhance customer service. Reality mining has the ability to contribute immensely towards healthcare. By gathering health related information

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through mobiles, they can predict disease outbreaks. With the aid of audio or motion sensors, changes in the nervous system can be deducted and this information could be used to screen depression.

Can Be Tricky Undoubtedly, technologies do not lie and reality mining certainly provides an authentic information about users. And mobile will record everything from users physical activity to conventional cadences, though they offer potential threat to individual’s privacy. In some point in time, accumulating personal information will raise several questions. Thus, industry and government ought to work on the legal and ethical framework regarding data. If data goes into wrong hands, information could be utilized for plotting. Who should hold the ownership of the massive data collected using reality mining would be a multi-million dollar question. Industry is yet to delineate about the usage of technology. This unstructured data has to be structured and utilized for the good of the society. Tech industry has to create right algorithms to process this horse power and exabytes of collected data.

Emerging Tech Mobile and Cloud Convergence

Symbiotic Soul Mates With its tremendous potential and lucrativity, there is no holding back the mobile-cloud convergence Highlights  Mobile-cloud convergence offers

hanks to the advancements in mobile browser, which has integrated 2 lucrative technologies—mobile and cloud and facilitated the creation of newer revenue streams and consumer experience. The amalgamation of mobile and cloud will drive revenues immensely, with the convergence of real-time communications service such as voice, video, and messaging mobile operators which can further enhance their service offerings like Voice over Long Term Evolution (VoLTE), Voice over Wi-Fi (VoWiFi), cost per thousand impressions (CPM), Rich Communication Suite (RCS), mobile video, group chat, and others. Mobile Cloud Computing Forum defines it as an infrastructure where both data storage and data processing happen outside the mobile device. Mobile cloud applications move the computing power and data storage away from mobile phones and into the cloud. It offers mobility, communication, and portability.

What Does Research Say? Visiongain, a London based research firm, has forecasted that mobile cloud services

mobility, communication, and portability  It has tremendous potential and can also drive development of new technologies and tools  It is vulnerable to traffic congestion, network failures, and out-of-signal while connecting to the cloud  Service providers can easily add and expand an application and service with or without little constraint on the resource usage revenue is expected to reach $45 bn in 2016 and it would grow at a CAGR of 55.18% from 2011. Mobile cloud computing opens up possibilities for a newer class of applications by leveraging handset centric features and network related information such as GPS, location based services, etc. It supports various tasks for data warehousing and managing and synchronizing multiple documents online. It is more reliable as the storage of data or applications on cloud can be done in a more effective way. It also provides a back-up of data. Security of the data is one of the major issues.

Prospects As the ecosystem evolves, mobile operators can leverage mobile cloud services. They can create new business opportunities. With the help of cloud they can offer differentiated services. These services also enable them to replace capex with opex and thereby enhance their business models. Mobile and cloud convergence along with the apt application helps telecom operators to completely leverage network, subscriber base, etc. To be a clear

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winner on mobile and cloud convergence technology, telecom operators ought to offer compelling service experience. Mobile and cloud both will complement each other and enhance the experience of customers alongside providing RoI to telcos. It is considered as a profitable business option for entrepreneurs which reduces the development and running cost of mobile applications and offer services at low cost. Service providers can easily add and expand an application and service with or without little constraint on the resource usage. It eases the process of integration and multiple services from different service providers can be integrated easily through cloud and internet to meet users’ demand. A few prominent mobile cloud applications include mobile commerce, mobile healthcare, mobile advertising, mobile payment, mobile agriculture, mobile gaming, etc. Bandwidth and security are the critical issues in mobile and cloud convergence. The convergence is vulnerable to traffic congestion, network failures, and out-ofsignal while connecting to the cloud.

Emerging Tech M2M

Always in Touch Since 2009, M2M applications, M2M-enabled devices, and M2M-related revenue generation business models have been gaining ground Highlights ď Ž Juniper Research says there

would be about 412 mn M2M and embedded devices globally by 2014 ď Ž M2M is driven by cloud computing and the proliferation of smartphones ď Ž Standardization of technology platforms and developing open protocols are critical

achine-to-machine (M2M) concept was cloudy since its inception in 2000 but in the recent years it has gained ground. Since 2009 M2M applications, M2M-enabled devices, and M2M-related revenue generation business models have been emerging significantly. M2M is being adopted globally in several verticals viz health care, utilities, advertising, transportation, energy, retail, agriculture, etc.

Factors Fueling Growth Machine-to-machine technology is being driven by cloud computing and the proliferation of smartphones. Juniper Research says there would be about 412 mn machine-to-machine and embedded devices globally by 2014. It is also driven by declining hardware, service cost, and due to the ubiquitous coverage. M2M technology is referred to as a communication between a machine and mobile terminal, from mobile to machine and vice versa or between a machine and a backend information system and vice versa. In automotive and commercial telematics sector, M2M enables tracking of

vehicles, controls traffic, manages fleets, integrates IT and finance, helps in saving fuel, and provides logistical efficiency. Smart metering has also proved to be a boon to utility verticals as it can assist in conserving electricity, match supply and demand, lower cost, and increase efficiency in collections. In BFSI and retail, technology can enhance more customer interactions and creates revenue opportunities. It will facilitate patient monitoring, real-time patient assessment, and emergency vehicle response in the healthcare segment. In India, the government has launched an ambitious M2M smart metering program under the National Solar Mission. The first phase (up to 2013) will focus on capturing the low-hanging options in solar thermal, promoting off-grid systems to serve populations without access to commercial energy, and modest capacity addition in grid based systems.

Major Deals In 2009-10, Spanish Telefonica had set up an M2M entity in Madrid. In 2010 in UK, MVNO Abica commenced trials with Telehealth and Telecare applications

which required secured data transit via private APN and HSPA+ connectivity. In early 2010 in the US, AT&T, KPN, Rogers, Telcel/America Movil, and Jasper Wireless announced their commitment to the field of M2M communication electronics. In February 2010, Vodafone, Verizon Wireless, and nPhase (a joint partnership of Qualcomm and Verizon) announced their strategic alliance to provide global M2M solutions across Europe and the US. In March 2010, Sprint and Axeda Corporation partnered.

Must Dos for Profit The M2M ecosystem, particularly telecom operators and system integrators, needs to standardize technology platforms and develop open protocols. Hardware design challenges should be tackled as there are cost implications of radio modules and each business requires unique requirements. Bandwidth requirements, device management platform, and operational support are critical concerns. Major issues on application design are back-end host applications and the ability to port applications to newer generation of technologies.

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Emerging Tech SOFTWARE DEFINED NETWORKING

Virtualizing Networks Software Defined Networking enables network engineers to control the network’s layout and traffic flow with the click of a mouse Highlights  Software defined network is

becoming hot in the carrier space, specifically in access services  Network service providers can leverage network virtualization to quickly deploy software applications  SDN design can steer traffic based on subscriber and application  The integration of the physical network with the virtual one is complicated

echnology has become an indispensable part of our lives as it has extended great comforts to us. It has also given us an awesome virtual world—we vent our feelings, we shop, and perform most of our personal and official work at the click of a mouse now. For these services, data centers and more importantly networks are critical. Services offered currently can be delivered with ease and zero-error if the networks are more flexible. In this regard, computer scientists’ worked towards virtualizing network functions and they reaped fruits in the form of Software Defined Networking (SDN). SDN is developed on a standard called OpenFlow. Installing a small piece of OpenFlow firmware (a software embedded in hardware) gives engineers an access to flow tables and rules that tell switches and routers how to direct network traffic. It also protects the proprietary routing instructions that differentiates one company’s hardware from another. In short, SDN is a process of separation of network data traffic processing from the logic and rules controlling the flow, inspection, and modi-

fication of that data. It is also termed as ‘virtualizing the network’. Software defined networking enables network engineers to control network’s layout and traffic flow with the click of a mouse. This software based access allows computer scientists to inexpensively and easily test new switching and routing protocols as well. Network service providers are under tremendous pressure to reduce operational costs and are increasingly aware of the total cost of ownership (TCO) for their platforms. Decouping services software from the underlying hardware introduces a new dimension for cost savings via SDN.

Opportunities Software defined network is emerging in the carrier space, specifically in access services. SDN has the incredible capability to control network traffic. It enables to give video priority over e-mail and reduces the annoying stops and starts that sometimes plague streaming video. They can also have control over customer offerings. By setting up rules for traffic coming from or going to a certain destination, it allows engineers to quarantine traffic from a computer

56 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

suspected of harboring viruses. By employing techniques such as deep packet inspection (DPI), network service providers can optimize available bandwidth which results in dramatic cost savings. Geographic load balancing and power management can be handled easily and efficiently. SDN offers flexibility, performance, agility, and security. Network service providers can leverage network virtualization to quickly deploy software applications. They can also offer newer revenue generating services that can be brought to market in shorter timescales. SDN has the ability to reduce the costs and expedites the rollout of fixed and mobile access services. Because SDN design can steer traffic based on subscriber and application to the right inline processing using global overlays that share resources between locations. Despite the advantages, there are few issues as well. The integration of the physical network with the virtual one is complicated. SDN has to handle practical problems of IT. The rate of adoption is very minimal at present, however, it has a great potential to revolutionize network management.

www.panduit.com/india +91 80 49122106

Overall Analysis

Surprisingly Good! The unexpected growth, led by the cellular industry, saved Indian telecom from total disaster Telecom Services Industry (FY2011-12) Segment

Revenue (in `crore)

Change (%)

FY11-12

FY10-11

Cellular

118,537

101,434

16.86

Fixed

12,148

14,946

-18.72

NLD

18,598

21,856

-14.91

ILD

25,705

25,637

0.27

Broadband

6,971

7,003

-0.46

VSAT

500

471

6.16

Total

182,459

171,347

6.49

t was a big surprise—the performance of the Indian telecom services industry in the last fiscal—it actually grew! It was quite unexpected—the consumers did not expect it and neither did the industry. What they expected was a collateral damage, if the factors that flanked the industry are to be reviewed closely. First, the ghost of the 2G scam is still going strong and looks all set to continue to haunt the industry for a long time still. Some of the top operators, bureaucrats who control the industry to a great extent, and the official machinery including the PMO were not spared from this witch hunt. Second, the policy uncertainty, a byproduct of the 2G scam and the resultant corrective measure, proved to be a spoilsport for the industry’s performance. It made the entire telecom ecosystem very apprehensive and it was compelled to take each step cautiously. Be it launching new services or expanding the existing

V&D Estimates

network or going for a strategic tie up. The policy loopholes also kept the investors at bay through last year, resulting in many anticipated recapitalizations in many telcos, resulting in lower investments. Third, the greed of garnering more and better ARPU from consumers from data services rather than voice, put the operators, who have dual permission for 3G and BWA services, in a dilemma. Dilemma about where to put their money! As if that was not enough, the apex court’s verdict to cancel all 122 licenses issued during 2008 spelled the death-knell for the Indian mobile services industry—at least for few if not for all. Result, few operators downed their shutters and went back to where they had come from. So the industry expecting a collateral damage was not at all unjustified! But the industry, defying all speculations, grew by 7% in FY 2011-12 to bring in revenues of `182,459 crore compared to `171,347 crore a year back. Looking at the developments of the Indian telecom

58 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

industry for the last year—that remained in the news mostly because of scams and scandals and lacked any significant sectoral development—the industry stakeholders would pat their own backs seeing this growth, though a miniscule one. As they say…when the going gets tough, the tough get going…it was the Indian cellular industry that once again proved its mantle and rose as a savior for the sinking telecom industry. It was cellular that has been suffering from various issues, but when the act demanded, it showed its character. It grew by 17% to bring `118,537 crore in FY 2011-12 compared to `101,434 crore in FY 2010-11. Overall, it contributed 65% of the entire industry’s revenue. In terms of cellular subscriber base, the country added more than 107 mn new connections in the last fiscal taking the tally to more than 900 mn wireless subscribers. It’s a different fact that all subscribers are not active. A Voice&Data analysis estimates that the active mobile subscrib-

Broadband

Cellular

Fixedline

Total Market Size: `6,971 crore (FY 2011-12)

Total Market Size: `118,537 crore (FY 2011-12)

Total Market Size: `12,148 crore (FY 2011-12)

22.4% Vodafone

47.73% BSNL 16.11% Bharti

11.2% Others

13.6% Idea

27.2% Bharti Airtel

61.4% BSNL

11.8% Rcom

9.78% MTNL

16.1% MTNL

7.4% 7.2% TTSL BSNL 7.32% RCom

1.8% TTML

4.59% Tata Comm

1.2% MTS

0.5% MTNL

1.71% You Telecom

1.2% Uninor

0.5% Loop

0.3% Others

1.56% Sify

4.9% Aircel 4.2% RCom

5.9% TTSL

7.6% Bharti airtel

2.8% 1.0% TTML 0.9% Vodafone Quadrant Televentures

ILD

NLD

VSAT

Total Market Size: `25,705 crore (FY 2011-12)

Total Market Size: `18,598 crore (FY 2011-12)

Total Market Size: `500 crore (FY 2011-12)

20.18% Bharti

53.47% Tata Comm 30.36% BSNL

14.58% RCom 10.29% Bharti

5.04% Vodafone 0.07% Tulip 0.18% Singtel 0.36% Equant

16.79% Vodafone

8.46% RCom 5.97% BSNL 2.68% BT

1.91% 1.66% Aircel Verizon 1.52% 1.01% AT&T 0.71% Idea 0.55% C&W Sify

ers in India on both technologies like CDMA and GSM could be in the range of 70-76% of the total wireless subscribers. Three operators—airtel, Vodafone and Rcom—crossed the 150 mn user mark by the end of the last fiscal, and Idea Cellular crossed the 100 mn mark with BSNL following closely with 98 mn subscribers. In terms of revenue, Bharti airtel still remained at the top with `32,227 crore with a market share of 27%. But its revenue growth was the least among the top five cellular operators—a mere 5%-whereas its nearest competitor, Vodafone India, grew at 30%, Idea at 31% and TTSL

0.79% Others

9.6% Idea

5.75% 4.8% Tata Teleservices Tulip telecom 1.13% PGCIL 0.88% Railtel 0.71% 0.48% Tata com Sify tech 0.07% Aircel

at 32%. Even Aircel grew 28% during last fiscal. But the maximum growth in the cellular industry was witnessed from CDMA player MTS. It grew 104% to register ` 1, 406 crore in FY 2011-12. The sad part for the industry was that few players like Loop and Etisalat had to shut shop at the fag end of the last fiscal post the Supreme Court’s order on license cancellations. Besides the cellular industry none of the segments that Voice&Data surveys saw any growth. Fixed, NLD and Broadband saw dip in their respective revenues. The fixedline industry, as expected, did a huge plunge of 19% to close the year at `

33.4% Hughes Communications

21.4% Bharti airtel 16.8% Tatanet 15.6% HCL Comnet

4.2% BSNL

5.6% Essel Shyam

3% Others

12,148 crore compared to `14,946 crore in FY 2010-11. The convenience of wireless has been increasingly and consistently been eating away its share of the market. Wherever it has grown, was because of its relevance and necessity to be supplied with DSL broadband services. Likewise, the NLD market saw a dip of 15% during last year. The NLD industry ended with `18,598 crore in FY 2011-12 compared to `21,856 crore in FY 2010-11. Interestingly, the NLD minutes have increased in the last year, though it failed to translate the usage into revenues. Mostly because the tariff for local calls and long

A CyberMedia Publication | voicendata.com | JULY 2012 | VOICE&DATA | 59

Overall Analysis

Telecom Equipment Industry (FY 2011-12) Product Categories Enterprise Equipment

Revenue (in `crore) FY11-12

FY10-11

Growth (%)

Voice Solutions

2,637

2,290

15.15

Network Integration

5,962

5,873

1.52

Router

2,970

3,251

-8.64

Switch

4,559

4,318

5.58

Structured Cabling

1,577

1,311

20.29

Audio Video Conferencing

391

337

16.02

WLAN

510

419

21.72

1,645

1,587

3.65

Modem

332

378

-12.17

Others

2,600

1,527

70.27

Total

23,183

21,291

8.89

Broadband

1,367

899

52.06

Transmission

3,825

4,896

-21.88

941

831

13.24

Managed Services

5,626

Telecom Turnkey

1,862

5,362

-65.27

Telecom Cable

1,422

1,299

9.47

698

670

4.18

Telecom Software

25,443

23,854

6.66

Wireless Infrastructure

10,930

18,374

-40.51

Others

3,219

2,100

53.29

Total

55,333

58,285

-5.06

31,215

33,031

-5.50

235

218

7.80

Tablet

1,962

231

749.35

Data Card

1,260

1,077

16.99

Total

34,672

34,557

0.33

Grand Total

113,188

114,133

-0.83

Network Storage

Others include: NIC, Radio, VSAT and RAS

Carrier Equipment

Test & Measurement

Power Management

Others Include: Telecom Tower, Wireline Switch, Submarine Switch, WiMax and OSS/BSS

User Device Handsets Fixed Phone

60 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

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www.dialogic.com

Overall Analysis

Top 10 Players (FY 2011-12) Rank

Players

Revenue (in `crore)

Change (%)

Rank (FY 2010-11)

FY 2012-11

FY2011-10

Airtel

71,451

59,538

16.67

Vodafone

34,099

27,348

19.8

BSNL

28,447

29,688

-4.36

RCom

20,382

23,108

-13.37

Idea

19,489

15,438

20.79

Tata Comm

14,341

12,185

15.03

TTSL

10,512

8,280

21.23

Aircel

6,651

5,392

18.93

MTNL

3,595

3,951

-9.9

TTML

2,488

3,128

-25.72

211,455

188,056

11.07

Total

V&D Estimates

distance calls are almost identical and its losing the differential sharply. The ILD industry in India remained almost flat, or rather a negligible growth of 0.27, during last fiscal. The industry made `25,705 crore in FY 2011-12 compared to `25,637 crore in FY 2010-11. Among the top five ILD players, only Tata Comm and Vodafone could have some headway in this business last year. Tata Comm grew by 20% to close its books with revenue of ` 13,744 crore compared to `11,480 crore in FY 2010-11, whereas Vodafone grew by 40% to end the year with revenues of `1,295 crore from `925 crore in FY 2010-11. The much talked about, discussed and pushed industry segment—Broadband—too saw a dip in its business. Only BSNL, MTNL and Tata Comm could some growth in this segment. BSNL being the largest player in Indian broadband services mostly due to its widest reach across the nation saw a growth of just 0.57%. It ended the year with `3,327 crore in FY2011-12 compared to `3,308 crore in FY10-11, poor quality of service and lack of desired speed on its networks were key reasons for its poor performance. In terms of new broadband users the company did not see much difference. The users who were using its services just stuck to the service provider,

mostly because of no better choice. Bharti airtel, the second largest player in terms of revenue finished the year with revenue of `1,123 crore compared to `1,323 crore in FY 2010-11 showing a major dip of 15%. It indicates Bharti’s reluctance in increasing its penetration in existing service areas and its unwillingness to foray into newer territories. The company is mostly focusing on metros and A category cities. Even in metros, there are many areas the company has not started offering broadband services. The other PSU operator, MTNL, that operates only in two cities—Delhi and Mumbai—saw a growth of 18% in its broadband business. It ended the year with `682 crore whereas its revenue for FY 2010-11 was `579 crore. The company seems to be more focused on increasing its data revenue than voice as it took some major steps in increasing its broadband network as well as customer base. It increased its minimum broadband speed to 512 kbps in its service areas. It has also tweaked its tariff plans for broadband offerings to increase its customer base and has somehow brought in good results for the company. The Indian VSAT industry saw a growth of 6% in FY 2011-12 and that can be at-

62 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

tributed to the growing demands from the banking industry. The core banking facility and the involvement of financial transaction in the services ask for a dedicated and uninterrupted data connectivity, and VSAT services are apt for this. Besides, opening of new co-operative banks with the support of NABARD pushed the VSAT demand further in India. The industry made `500 crore revenue in FY 2011-12 from `471 crore in FY 2010-11. Hughes Communciations remained the #1 player in this space with revenues of `167 crore, showing a growth of 18% from its `141 crore business in FY 2010-11. The next fiscal is anticipated to bring a 360 degree change to the Indian telecom services industry, specifically, and the Indian telecom industry in general. Factors that justify these expectations are the rollout of 4G services by all major players, most importantly by RIL, and a clear policy framework laid down by the upcoming NTP 2011. Once the policy is cleared, the industry stakeholders, including the investors, would look at India with a different perspective and the growth momentum that the industry has tried their best to maintain, can again gain some teeth. Gyana Ranjan Swain gyanas@cybermedia.co.in

SEGMENT

ANALYSIS CELLULAR....................................................................................................................64 FIXED Line ..................................................................................................................72 NLD...............................................................................................................................78 ILD.................................................................................................................................82 BROADBAND...............................................................................................................86 VSAT.............................................................................................................................90

Wireless

The Balancing Act Marred by various issues like policy uncertainty, license cancellation, and reluctant expansion, somehow the industry managed to maintain the momentum

64 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

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Wireless

Top Cellular Players (FY 2011-2012) Players

Revenue (in crore)

Change (%)

FY11-12

FY10-11

Bharti Airtel*

32,227

30,692

5.0

Vodafone

26,564

20,503

29.6

Idea

16,069

12,265

31.0

Rcom

13,998

12,725

10.0

TTSL

8,723

6,600

32.2

BSNL

8,521

8,410

1.3

Aircel

5,834

4,557

28.0

TTML

2,125

1,961

8.4

Uninor

1,440

916

57.2

MTS

1,406

690

103.8

MTNL

639

876

-27.1

Loop

580

698

-16.9

Others

411

541

-24.0

Total

118,537

101,434

16.9

Others include: Videocon, Quadrant Televentures, Stel and Etisalat *Bharti Airtel revenue includes India & South Asia

he Indian cellular services space offered a rather uncomfortable look the entire last fiscal. It seemed nothing really moved in this industry and the sector was seriously affected by the numerous unwanted and unhealthy factors throughout the year. One of the newest things for the Indian mobile services users—3G—was launched in the FY11, and it was expected and awaited by the Indian consumers that the 3G services would take flight and proliferate in FY12.

V&D Estimates

the active user base is 40% of the total 3G subscriber base. The second factor that gave a gloomy look to the Indian cellular business is the intense wait for the launch of 4G services.

Market Share

Total Market Size: `118,537 crore

22.4% Vodafone 13.6% Idea

27.2% Bharti Airtel

The Factors But the entire last year did not see much action from the operators on 3G barring some marginal price cut in their tariff plans. A large chunk of the 900 mn plus Indian mobile subscribers are still not aware of what 3G can do for them or the utility of 3G services, though they just have heard of the word—an indication that telecom operators are not very keen on it. By the end of March 2011, there were just 20 mn 3G subscribers whereas

11.8% Rcom 7.4% 7.2% TTSL BSNL 1.8% TTML 0.5% MTNL 0.3% Others

66 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

1.2% MTS

4.9% Aircel 1.2% Uninor

0.5% Loop V&D Estimates

Highlights  Slow 3G take off affected the

cellular industry

 Wait for 4G services indirectly

affected the industry  Policy doldrums too played spoilsport  Operators slowed down network expansion plans due to policy uncertainty  Cancellation of 122 licenses by the Supreme Court gave a cold shoulder to the industry

The wait was witnessed both by the consumers as well as the service providers. Consumers waited to witness the next phase of wireless broadband services that could theoretically give them up to 100 Mbps of download speed, and service providers waited because they wanted to take a decision on where they would put their investment in—3G or 4G? This dilemma affected the 3G services expansion and in turn affected the cellular business as a whole. The third factor that had a detrimental impact on the industry was the controversy surrounded with the 2G spectrum auctioned earlier and the subsequent license cancellation by the apex court. In total, 8 operators and 122 licenses were affected. This harsh step made some operators shut shop in India and couple of threatening to quit business here. Operators who were mulling to infuse more funds to their expansion plans withheld their orders and preferred to wait and watch the policy clarity. Lack of network expansion at a time of ever increasing consumer base affected the QoS and the net addition of mobile subscribers came down heavily. Last fiscal saw net subscriber addition averaging to 9 mn per month. In FY12, India added 107,583,952 new subscrib-

For the past two financial years, Bharti airtel’s net profit is showing a southward move and that too a consistent one

ers taking the total tally to 919,173,053, ie, more than 911 mn customers, however these may not all be active users of mobile services.

The Players The leader in the Indian telecommunications services industry, Bharti airtel, retained its leadership position in the V&D100 2012 survey. By the end of the last fiscal, the company remained the clear leader in terms of revenue as well as in subscriber numbers. The company ended the year with 181 mn mobile subscribers and is having the maximum number of active users compared to

other operators. It grew 11.8% during the period in terms of net subscriber addition and holds a subscriber market share of close to 20%. Bharti airtel, though has been the market leader for quite some time now, both in value and volume terms, has been going through a rough phase in increasing its bottomline. For the past 2 financial years, the company’s net profit is showing a southward move and that too a consistent one. And that has been an area of concern for the Sunil Mittal-led company in the last fiscal which the company would seriously like to address in this fiscal.

During the last year, Bharti announced the expansion of its managed services agreement with Ericsson for its India operations. The new agreement which is a 5-year multi-vendor, multi-technology managed services agreement, under which the Swedish company will operate, maintain, and provide services across 70% of Bharti airtel’s network in the country. The managed services will be rendered through a Global Network Operation Center (GNOC) and field operation activities spread throughout the country. The 15 telecom circles under the scope of the partnership include: Delhi, Jammu and Kashmir, Haryana, Punjab, Himachal Pradesh, UP (W), UP (E), Rajasthan, North Eastern states, Assam, Karnataka, Andhra Pradesh, Tamil Nadu, Chennai, and Kerala. Extending its financial inclusion services for its mobile customers it launched airtel money in a big way. Bharti airtel has chosen Infosys as its technology partner for its mobile wallet service ‘airtel Money’. Under this partnership, Infosys WalletEdge—the mobile commerce platform will enable the ubiquitous mobile wallet service to support cashless payments and settlements needs of diverse customer segments. The platform will enable ‘airtel Money’ customers to pay bills, recharge accounts, shop at over 7,000+ merchant outlets, transact online through multiple channels including mobile phones, interactive voice response, ATMs, and point-of-sale. The WalletEdge platform is delivered through a private cloud, and creates a comprehensive shared services

A CyberMedia Publication | voicendata.com | JULY 2012 | VOICE&DATA | 67

Wireless

3G Coverage in India Operators

3G Licensed Circles

No of Cities/ towns

No of Subscribers (In Mn)

Airtel

Delhi, Mumbai, AP, Karnataka, Tamil Nadu, UP(W), Rajasthan, WB, HP,Bihar, Assam NE,J&K

1100 cities

Aircel

AP, Kartanaka, Kolkatta , Kerela,Punjab, UP(E), WB, Bihar,Orissa, Assam, NE, J&K

107 town

1.2

BSNL

Pan India sans Delhi and Mumbai

963 cities

Idea

Mahatrastra, Gujarat, AP, Kerela, Punjab, Haryana, UP(E),UP (W), MP, HP, J&K

MTNL

Delhi, Mumbai

RCom

Delhi, Mumbai, Kolkatta, Punjab, Rajasthan, MP, WB, HP, Bihar, Orissa, Assam,NE, J&K

STel

HP, Bihar, Orissa,

TTSL

Mahatrastra, Gujarat, Karnataka, Kerela, Punjab, Haryana, UP(E), UP(W), MP

Vodafone

Delhi, Mumbai, Maharastra, Gujarat, TN, Kolkatta, Haryana, UP(E), West Bengal

framework, allowing members of the ecosystem to process payment instructions seamlessly and cost efficiently. To encourage airtel users to use data services on their mobile phones, the company in the last quarter offered free access to Twitter for a period of 3 months. Small steps, like this, helped the largest telco in retaining its existing customers when MNP started taking a toll on its subscriber churn. Vodafone India, by the end of March 2012, added close to 16 mn new subscribers reaching a total of 150 mn figure, growing at 11.8%. It became the third player to touch the 150 mn subscriber mark after Bharti airtel and RCom. The company’s service revenue grew by 19.5%, driven by an 11.8% increase in the customer base, strong growth in incoming and outgoing voice minutes, and 51.3% growth in data revenue. 3G services were available to Vodafone customers in 860 towns and cities across 20 circles as of March 31, 2012. The

3,000 towns

2.6

2 cities

0.6

333 towns

3.2

Service not started

62 cities

3.3

860 towns

1.3

growth also came from mobile operators starting to charge for SMS termination during the second quarter of the 2012 financial year. As of March 31, 2012, the customer

Market Size (in `crore) Revenue (FY 2011-12) 19.1%

120,000

60,000

118,537

99,506

2011-12

2010-11

68 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

V&D Estimates

base had increased to 150.5 mn, with data customers totaling 35.4 mn, a y-o-y increase of 81.5%. This was driven by an increase in data-enabled handsets and the impact of successful marketing campaigns. Whilst the market remains highly competitive, the effective rate per minute remained broadly stable during the year, with promotional offers offsetting headline price increases. The company had 1.3 mn 3G customers by the end of the last fiscal. The company also increased its mcommerce presence in the country and launched m-pesa in Rajasthan and is planning to make it a pan-India service in this fiscal and would launch services in phases. In a significant move, On July 1, 2011, Vodafone Group and the Essar group agreed the terms under which the Essar group would dispose of its entire interest in Vodafone India (VIL). Further, the parties agreed that all outstanding claims between them were terminated, and that all future claims be renounced. The parties also agreed to cooperate fully in seeking all regulatory approvals necessary for the completion of the transactions and the Essar group relinquished all of their board seats in VIL. Under the terms of the agreements, Essar Communications and Essar Com, sold their entire 22% shareholdings in VIL to Vodafone Group taking Vodafone Group’s direct shareholding to 64.4%. The total cash outflow from Vodafone Group was $4.2 bn (£2.6 bn), comprised of a net payment of $3.3 bn (£2.0 bn) after withholding tax of $0.9 bn (£0.6 bn). The transfer of these shares to Vodafone Group was completed in 2 tranches on June 1, 2011, and July 1, 2011. Under a separate agreement, ETHL Communications Holdings sold its 11% shareholding in VIL in 2 equal tranches to Piramal Healthcare, completing in August 2011 and February 2012. The next big player in the Indian mobile space RCom also crossed the 150 mn subscriber mark during last year from 135 mn in 2010. Running almost at the same pace as other big GSM players, the Ambani group owned firm added close to 3 mn 3G subscribers during this

Operators’ Subscriber Base FY 2011-12 (SIM card numbers and not active users)

Players

FY11-12

FY10-11

Change (%)

Bharti Airtel

181,279,296

162,203,480

11.8

RCom

153,045,692

135,718,541

12.8

Vodafone

150,465,330

134,569,706

11.8

BSNL

98,512,988

91,834,126

7.3

Idea Cellular

112,722,692

89,503,318

25.9

TTSL

81,745,797

89,138,713

-8.3

Aircel

62,572,579

54,843,290

14.1

Uninor

42,431,924

22,792,141

86.2

SSTL

15,803,039

10,056,934

57.1

Videocon

5,951,588

7,105,960

-16.2

MTNL

5,832,398

5,473,081

6.6

Loop Mobile

3,267,241

3,094,204

5.6

Stel

3,430,288

2,820,891

21.6

HFCL

1,329,910

1,466,637

-9.3

782,291

968,079

-19.2

919,173,053

811,589,101

Etisalat Total

The ongoing telecom scam and the corresponding license cancellation affected all other telecom operators barring the top 4 companies. Among the smaller players, STel, Loop, and Etisalat shut shop during the period

13.3 V&D Estimates

period. During the last fiscal, the scam hit company’s wireless ARPU has come down to `102 from `116 in FY11. As on March 31, 2011, the company had rolled out 3G services in all circles where they have 3G spectrum, covering over 333 towns. On CDMA platform, Netconnect broadband+ service is available in over 1,000 cities with seamless handover to 1x service across 20,000 towns. In revenue terms it made `17,695 crore during FY12 from `12,725 crore in FY11. The other company that saw significant growth both in terms of subscriber base and revenue is Idea Cellular. The Aditya Birla led firm added 23.2 million subscribers taking the overall tally to 113 million customers. Its thought leadership on Mobile Number Portability (MNP) and 3G further consolidated the company’s competitive standing. So far, over 3 million users have chosen to port to Idea via MNP, the highest in the industry. The company is accelerating the deployment of 3G ecosystem, by launching Idea branded 3G

handsets. The company is also focusing on ensuring availability of handsets in smaller towns, giving consumers the choice to go for replacement and opting for 3G handsets. Focus is also on creating relevance of 3G services for the customers by finding the right kind of applications and offering the right kind of content. Moving to a company that did expectionally well the last fiscal Aircel through building of the strong data positioning. In terms of capex, the company has so far invested more than `45,000 crores and remains the highest foreign investment in India by far. In 2011, Aircel invested a further sum of `3,000 crores towards the completion of rollout of 3G networks and augmenting 2G networks. Aircel has also optimized its investment in network in 2011 by pioneering 3G intra circle roaming with Tata thereby expanding its services to many new markets at a substantially lower capital outlay. As usual and signature to governmentowned companies, the 2 PSU operators,

BSNL and MTNL, did not seem to be interested in doing business anymore. Both the companies have been consistently losing ground and their revenues have also been going down. FY12 was no different. Barring a few tariff plans, both the companies did not make any advancements in their respective business areas. The ongoing telecom scam and the corresponding license cancellation affected all other telecom operators barring the top 4 companies. Among the smaller players, S Tel, Loop, and Etisalat shut shop during the period owing to couple of reasons. One—their license were canceled, and two—they could not sustain the tough competition in the Indian telecom services market that seems to be over crowded. The other 2 new players—MTS that offers CDMA services and Uninor have shown enough character and performed much better than the others including the top 5 companies. Ritu Singh ritus@cybermedia.co.in

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Fixedline

Time to Bid Adieu? A few services may bring some cheer to fixedline services, but it’s hard to gain traction and increase revenues

raditional landline services is losing its hope since the advent of the wireless telephone. It is just getting worse and worse due to the affordability and proliferation of mobile. Although a few services such as triple play—broadband internet, voice, and video over an IP network—may bring some cheer to fixedline services, yet it is hard to gain traction and increase revenues. The fixed services market is pegged at `12,148 crore in FY12.

Wireline Subscriber Base A c co rd i n g to t h e e st i m ate s b y VOICE&DATA, the total wireline subscrib-

ers have declined from 34.7 mn in March 2011 to 33.4 mn in 2012. Its growth rate dipped by 3.7% in the fiscal 2012. The overall wireline teledensity is 2.66% as on March 2012; urban and rural teledensity being 6.67% and 0.88%, respectively, according to Trai. In terms of subscribers, BSNL has a market share of 71.2%, its subscribers have declined from 25.2 mn in March 2011 to 23.8 mn in March 2012. MTNL’s market share is 10.3%, its subscriber base reduced to 3.4 mn in March 2012 from 3.5 mn last year. The fixedline services market share of Bhart airtel is 10%, based on the subscribers. Reliance, Tata (Tata Teleserv-

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ices and Tata Maharashtra Teleservices) have over 3.7% and 4.1% market share, respectively. While Quadrant and Sistema Shyam Teleservices have 0.6% and 0.1% market share, respectively as on March 2012. According to a report by Telecom Regulatory Authority of India, Public Call Office (PCO) connections in India are 2.37 mn, as on December 31, 2011. BSNL, MTNL, Bharti airtel have installed 1.19 mn, 0.16 mn, and 0.05 mn, respectively. Quadrant has 0.01 mn and Sistema has 0.02 mn PCO installations. Tata and Reliance Communications have installed 0.67 and 0.27 mn. At the end of December 2011, there were 5.832 lakh

Fixedline

Highlights  Fixedline is still breathing due to the demand from enterprises  Service providers are bundling broadband and IPTV of late, to retain and

to attract fixedline customer base  Revenues from broadband services will significantly contribute to the overall growth of fixedline services  In order to woo landline service customers, BSNL has launched video telephony service in association with SIS  The replacement of fixedline phone by mobile phones is a worldwide trend

VPTs across 593,731 inhabited villages in the country. There is an unprecedented growth in the wireless space and its subscribers are growing at a compounded annual growth rate (CAGR) of 57.1% since 2004. On the contrary, fixed wireline is declining steadily.

Enterprises Regime in Fixedline Fixedline is still breathing only due to the demand from business needs, ie, from enterprises and SOHO; connections to homes is on the verge of its last breath. Enterprises would anytime prefer a host of fixedline phones, its services, and fixedline broadband for the day-to-day affairs of the business because it ensures permanent connection and in the case of broadband, it will be a guaranteed bandwidth with speed. This helps in connecting all offices and remote workers. It will be easier to add connections anytime and up to 50 people can share the same line. Fixedline phones will always be sought after because it comes with various advantages such as IP telephony solutions which can be integrated with a choice of soft phone desktop applications. It will also help in tracking. Service providers are bundling broadband and IPTV of late, to retain and to attract fixedline customer base. VoIP services when integrated into fixedline services will enhance the uptake of fixedline. But unfortunately, VoIP is engulfed with some regulatory issues which need to be sorted out.

Operators are providing fixedline services along with the broadband connections, hence broadband penetration will most probably enhance the fixedline services market. Broadband service is the only silver lining to wireline uptake and in the next 5 years, revenues from broadband services will significantly contribute to the overall growth of fixedline services in India, according to the industry perception.

Fixedline Services Revenue from voice services will continue to dominate the overall fixedline services

Market Share

Total Market Size: `12,148 crore

61.4% BSNL

16.1% MTNL

4.2% RCom

5.9% TTSL

7.6% Bharti airtel

2.8% 1.0% TTML 0.9% Vodafone Quadrant Televentures

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V&D Estimates

Fixedline is still breathing only due to the demand from business needs, ie, from enterprises and SOHO; connections to homes is on the verge of its last breath in India but its contribution is expected to go down significantly. The connection and calling revenue is falling slowly. Revenue from broadband services is significantly contributing to the overall growth of fixedline services in India, with a growth of 25% from 2008 to 2013. High-end fixed telephones which are even wireless uses broadband modems that offer high-speed internet connection, bypassing the telephone system. The fixed phone segment is consistently innovating products with value added features like internet browsing, text/picture messaging, or integrated camera to attract consumers. Its other features include polyphonic ringtones. Also, FM radio is becoming increasingly popular as customers are looking for additional features on their fixedline phones. In the cordless phone segment, the thrust is on sleek and slim models with features like phone book, 3-way conference calls, and 2.4 GHz digital technology. The pubic sector undertaking BSNL has launched video telephony service in association with Sai Infosystems (SIS) in order to woo landline service customers. The cost of video telephone starts from `14,900 up to `34,900. This service can be availed only by broadband connections. As it is pretty high for starters, the company is also supplying them on a monthly rent basis. BSNL also of-

Fixedline

Top Fixedline Players (FY 2011-12) Players

Revenue (in `crore)

Change (%)

FY 11-12

FY 10-11

BSNL

7,462

10,757

-30.6

MTNL

1,957

1,528

28.1

Bharti airtel

925

1,050

-11.9

TTSL

719

620

16.0

RCom

515

525

-1.9

TTML

345

288

19.8

Vodafone

120

126.4

Quadrant Televentures

105

125

-16.0

12,148

14,946

-18.7

Total

V&D Estimates

fers Voice and Video over Broadband (VVoBB). The public sector operator MTNL launched the ‘number retention facility’ in Mumbai to woo corporate fixedline services in 2010. This service enables Mumbai’s fixedline subscribers to retain their existing landline numbers in case of shifting their landline phone from one telephone exchange area to other telephone exchange area, anywhere in Mumbai, Navi Mumbai, Thane, Panvel, and Uran MTNL fixedline service area. The subscriber also gets 2 telephone numbers (one existing and one new) on his same landline phone. In May 2012, the company launched SMS based missed call alert service on landline in association with USA based company Universal Software. As the growth has reduced considerably in the Delhi and Mumbai regions, the company is eyeing overseas market particularly in African region to gain organic and inorganic growth opportunities. MTNL intends to roll out WiMax, NGN based fixed services, fixed mobile convergent services, etc. Airtel provides customized bundled plans. It also offers digital voice solutions along with IP. airtel offers centrex services, hosted contact center, dialport, direct exchange line, managed ISD, unique directory number services, etc. Corporate services include short-

digit dialing, direct inward dialing, 3-way conferencing, voice mail, call pick, parallel ringing, and auto callback. airtel’s prominent strategy with regard to fixedline is to ‘going deeper rather than wider’ by focusing on cities that have larger revenue potential. airtel is eying on SMB and SME segment in the wireline space. Reliance Communications offers highend features, attractive tariff plans on landline phones. Features include—phonebook, call history, 3-way conference, caller ID, ringtone, ringer volume, LCD contrast,

Market Size (in `crore) Revenue (FY 2011-12) 15,000

-18.7%

7,500 12,148

14,946

2011-12

2010-11

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V&D Estimates

voicemail, speaker phone, etc. Besides, it also provides, delayed hotline which is programmable to automatically call a predefined number, remote phone management which can lock or unlock STD/ISD facility, and hotline settings. To enhance the user experience, it has employed ‘intelligent FSK telephony’ along with STD and global calling card. It comes with features like next-gen caller ID, delayed hotline, navigation keys, and remote phone management to lock or unlock STD/ISD facility or hotline settings. Rcom’s array of value added services in wireline space consists of voice products like E1 DID, centrex, PBX trunks, one office duo, toll-free, audio conferencing, etc. Tata brand offers landline services based on the state-of-the-art optical fiber cable based backbone in order to enable the network to handle higher capacities of load as compared to ordinary cables and at much higher transmission speeds. Tata Teleservices (Maharashtra) (TTML) is offering landline services since 1998. It commenced full mobility wireless services on the CDMA-1X platform in 2004-05. Quadrant Televentures (formerly HFCL Infotel) operates in Punjab telecom circle. Not just in India, the replacement of fixedline phone by mobile phones is a worldwide trend. In recent years, although landline services have become more efficient in terms of quality of services and landline network quality, yet it has failed to bring in hope. There has been an improvement in QoS for wireline as well. Average percentage of calls answered by the wireline operators (voice-to-voice) within 60 seconds across the country increased from 88.8% in 2006 to more than 95% by March 2011. The Indian retail consumer brings less hope to fixedline services market, however, there would be huge demand from enterprises. And hence the fixedline service market may not vanish in the near future despite its incessantly declining trend in the market. Malini N malinin@cybermedia.co.in

NLD

Downward Strides The Indian NLD market has entered a growth mode only with the usage increasing and but not translating into proportionate revenue

Highlights  NLD minutes of usage grew in   



he Indian national long distance market is on a growth phase, but only in terms of usage that is not translating into corresponding revenue. Though the margin between local call tariff and long distance call tariff is shrinking each passing day, it is showing a positive impact on the usage pattern. More and more long distance calls are being made and, more importantly, the usage minutes are growing significantly.

Market Share

Total Market Size: `18,598 crore 20.18% Bharti 30.36% BSNL

8.46% RCom

Player Dynamics By the end of 2011, the largest operator, Bharti airtel, had its networks in 454,302 towns. Its optical fiber reach covers 157,886 Rkm as of March 2012 from 134,026 Rkm in FY11 for providing national long distance services. The company’s network is present in 5,118 census towns and 454,302 non-census towns and vil-

16.79% Vodafone

0.79% Others

9.6% Idea

5.75% 4.8% Tata Teleservices Tulip telecom 1.13% PGCIL 0.88% Railtel 0.71% 0.48% Tata com Sify tech 0.07% Aircel

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V&D Estimates

FY12 Margins erode as gap between local and STD call tariff shrunk BSNL did extremely well in NLD business New operators prefer leasing on other player’s network than building their own capacity BSNL, Railtel and PGCIL has been identified for the NOFN project for its reach and fiber resources

lages in India, covering approximately 86.4% of the country’s population. By the end of the last fiscal, Bharti airtel’s NLD minute usage had increased to 21.5 mn minutes from 19.5 mn units in FY11 showing a 10% growth.� In 2011, state-run firm BSNL did extremely well on its multiple services like mobile and NLD services. With respect to NLD services, the company has increased its revenue by `698 crore to net `5,646 crore. The company is providing end-to-end communication solutions to government departments, PSUs, banks, airlines and corporates in big way. Some of the projects bagged by the company include: CCTNS project, department of justice project for connecting all the courts in India, and NME-ICT project for providing internet bandwidth to colleges.

will drive the change

Creative advertising opportunities available ... Give a shout to Gulnar Oberoi at gulnaro@cybermedia.co.in

NLD

Top NLD Players (FY 2011-12) Players

Revenue (in `crore)

Change (%)

FY 11-12

FY 10-11

BSNL

5,646

4,948

14.11

Bharti

3,754

6,418

-41.51

Vodafone

3,122

3,522

-11.36

Idea

1,785

1,863

-4.19

Rcom

1,574

2,074

-24.11

Tata Teleservices

1,070

977

9.52

Tulip telecom

893

758

17.81

PGCIL

210

187

12.3

Railtel

163

180

-9.44

Tata com

132

213

-38.03

Sify tech

135

-34.07

Aircel

458

-97.16

Others

147

123

19.51

Total

18,598

21,856

-14.91 V&D Estimates

It’s a good beginning for the company as the Indian government has identified BSNL as one of the three players to deploy NOFN (national optical fiber network) due to its reach and fiber resources. The company has been identified for the NOFN project for its reach and fiber resources. It has 700,000 km of optical fiber countrywide and major part of it is in rural areas. Its fiber connectivity is present in 60,000 panchayats out of 2.5 lakh panchayats in the country. Aircel, though does not seem to be very aggressive in its business operations, offers a suite of world-class internet services and has 400+ PoPs located pan-India. The NPLC service is a domestic, point-to-point private leased circuit over national long distance infrastructure. Its NLD backbone network covers 36 cities through SDH and DWDM ring connecting 23,000 km. Since 2009, Aircel has been focused on non-Aircel long distance business which now generates about 1 bn minutes a month and contributes around `500 crore in FY12. Several new data services like Global MPLS VPNs have been launched by Aircel last year which now enable the company to provide smart connectivity to enterprise globally.

In terms of infrastructure, the Aditya Birla Group company Idea Cellular, currently has around 65,000 Rkm fiber cable transmission network for tapping wireless broadband. Idea is also expanding its optical fiber cable PoPs. Presently, it has over 1,700 PoPs (points of presence) in 128 cities and linked highways. The OFC network helps the company to serve 2G/3G/NLD/ ILD/ ISP/wireless broadband subscriber needs.

Market Size (in `crore) Revenue (FY 2011-12) 25,000

-14.91 %

On the NLD front, the company currently carries around 93% of Idea’s captive NLD minutes and handles over 95% of captive ILD outgoing minutes. And the focus is on expanding both NLD and ILD capacity to meet future requirement. For Tata Communications, national long distance voice traffic in India decreased by 18% to 8.55 bn minutes in 2011-12. However gross margins from voice declined 5% to US cents 0.45 per minute, from US cents 0.47 per minute a year earlier. The company’s NLD traffic has decreased from 1,039 crore minutes in 2010-11 to 855 crore minutes in 2011-12. Further, the contribution of net revenues from the India NLD business declined from `213 crore to `132 crore, due to the steep price erosion in this area. During the last fiscal, the DoT has granted NLD licenses to few more companies, the most significant name being Hughes Communications. The NLD license will allow the company to provide backhaul services to the telecom service providers of cellular (2G/3G), media & FM service providers, and broadband fixed & wireless services (LTE/BWA). Hughes has been a partner to mobile operators such as Reliance, Hutch, Idea, Spice, and Aircel. Hughes is investing over `25 crore in its greenfield Hyderabad capacity and over `10 crore in its MPLS network. In January this year, Norway’s Telenor, which retails mobile services under the Uninor brand, launched its own national long distance (NLD) network through a long-term bandwidth leasing pact with Tata Teleservices (TTSL). The company will lease capacity from TTSL for this facility, rather than build its own network.

The Next Phase 12,500 18,598

21,856

2011-12

2010-11

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V&D Estimates

Most service providers are looking at tapping the semi-urban and rural market increasingly to keep their growth going. In urban areas, where there is a reach of fiber and fiber extension through RF, there is a good backhaul infrastructure. Gyana Ranjan Swain gyanas@cybermedia.co.in

cloud computing

Securing the Cloud

A Perfect Match Telecom providers can prove to be ideal partners for cloud computing

hile â&#x20AC;&#x2DC;cloudâ&#x20AC;&#x2122; might be an overused word to describe what is effectively a natural evolution in terms of how existing technology is leveraged, businesses need to do more to harness the opportunity it provides. After all the hype, cloud computing is now really beginning to get traction, and not just in the smaller enterprises; a recent international survey by Ovum of more than 100 multinational corporations found a 60% increase in the take-up of cloud services among large organizations over the last year. The strongest showing is in Asia, which boasts an uptake of at least 63%.

Moving to Cloud The survey also shows that enterprises have already moved significant resources to the cloud and are ready to move more application services. The dominant areas of cloud services uptake are in data back-up and storage, at 51% of respondents, with an additional 33% reporting their intention to procure cloud data back-up and storage services in the next 24 months. The Ovum survey also found that

telecommunications providers are emerging as trusted partners for cloud computing. A year ago, 37% of enterprise users rated telecommunications providers as credible suppliers, but this increased to 49% in 2011. This is attributed to their capabilities in both managed hosting and managed networks. This trend is occurring as, fundamentally, all cloud services need to be positioned on a strong network platform. Without this communications layer, cloud computing cannot take place. Although cloud computing providers do provide this kind of network, telecommunications providers are extremely well-positioned to provide a very robust communications layer. Major telecommunications providers have the expertise in combining their network with managing data centers and they can use this expertise in building competitive advantage as compared to other players. They will be able to provide the essential bandwidth required, plus they already have the necessary experience at hand when it comes to delivering infrastructure. It is simply a matter of extending their core competencies into the cloud space.

The best way to secure the cloud computing environment, and to ensure application performance, is to make sure that the prime access routes are via the organizationâ&#x20AC;&#x2122;s own internal wide area network (private cloud), not the internet (public cloud). By placing services in a secure cloud environment within the wide area network, and using the established methods of data separation, data becomes intrinsically safer, and performance is not only better, but can also be managed by advanced application performance management networking tools. Therefore in order for cloud services to really penetrate the enterprise market, robust and secure hosting environments need to be combined with resilient, high performing, and secure next-generation networks, and both need to be ensured with stringent service level agreements. Telecommunications providers already have these issues covered: The all-important security question, the expertise, the facilities, and the infrastructure in place for providing hosted services. Moreover cloud computing has been looked on as the ultimate managed service and telecommunications providers have been in the managed service market for a long time.

The Existing Trend The existing trend of consolidation and network optimization remains the key drivers for telcos to upgrade their customer into SaaS and CaaS/UCaaS based offerings within their private cloud allowing cost benefits and ease of migration. The future of IT holds one thing for certain, growth will come from those businesses that are prepared to innovate and make bold decisions with the courage to move to the cloud, and telecommunications providers are the perfect match to capitalize on this opportunity. RITESH BHARGAVA The author is director, technology & consulting services, Cable & Wireless Worldwide India vadmail@cybermedia.co.in

A CyberMedia Publication | voicendata.com | JULY 2012 | VOICE&DATA | 81

ILD

Slowing Down ILD continues to face capital constraints in several parts of the world, as providers are concentrating now on investments in core business capabilities

urrently, the global ILD market is witnessing a slowdown. The wholesale ILD industry in India is pegged at `25,705 crore with 0.27% of growth in FY12. The ILD sector continues to face capital constraints in several parts of the world, as providers are concentrating now on investments in core business capabilities. For Tata Communications, the situation has become much more favorable as it experienced significant growth last year. In the last year, it concentrated on quality management, fraud monitoring, and pro-active prevention.

In order to increase its voice business efficiencies, the company developed a series of strategic sourcing solutions to help customers improve their productivity in terms of routing, reporting, pricing etc. Tata Communications embraced new technologies to enhance its wholesale voice business like IP voice migration and new solutions development such as IPX+ and HD Voice. The company allied with Formula 1 management to deliver connectivity to all 20 race locations over its global network which is the largest in the world. In this alliance, it will also provide hosting and content delivery services to Formula1.com

82 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Tata Communications launched TGNGulf cable system connecting India, Oman, UAE, Qatar, Bahrain, and Saudi Arabia, and onward to the world. The company also owns the only wholly owned cable network ring around the world. The company is also focusing on providing innovative solutions such as IPX or HD Voice. In India, one of its investments was in 3G enablement and upgrading the India network to NGN. Not far behind is Bharti airtel, its international infrastructure includes ownership of the i2i submarine cable system connecting Chennai to Singapore and consortium ownership of the SMW4 sub-

ILD

Top ILD Players (FY 2011-12) Players

Revenue (in `crore)

Change (%)

FY11-12

FY10-11

Tata Comm

13,744

11,480

19.72

Rcom

3,748

5,778

-35.13

Bharti

2,646

3,578

-26.05

BSNL

1,534

1,540

-0.39

Vodafone

1,295

925

689

509

35.36

Aircel

491

377

30.24

Verizon

427

393

8.65

AT&T

391

444

-11.94

Idea

259

172

50.58

C&W

183

145

26.21

Sify

141

130

8.46

Equant

130

-28.46

Singtel

32.35

Tulip

850

Total

25,705

25,637

0.27

 Wholesale business deals with

 



V&D Estimates

marine cable system connecting Chennai and Mumbai to Singapore and Europe. Bharti also has investments in new cable systems such as Asia America Gateway (AAG), India Middle East & Western Europe (IMEWE), Unity, EIG (Europe India Gateway) and East Africa Submarine System (EASSy) expanding their global network to over 225,000 Rkms, covering 50 countries across 5 continents. airtel also has terrestrial express connectivity to neighboring countries including Nepal, Pakistan, Bhutan, and China. Reliance Communications is providing carrier’s carrier voice, carrier’s carrier bandwidth, enterprise data, and consumer voice services. The company performed fairly well in the ILD business. Currently, RCom has over 2.5 mn customers and its international data business is underpinned by its ownership of the largest private submarine cable system in the world, directly connecting 40 countries from the east coast of the United States, to Europe, the Middle East, India, South and East Asia, through to Japan. As part of its wholesale offering, RCom

offers national and international (submarine cable) network infrastructure on both an Indefeasible Right of Use (IRU) and leased circuit basis, internet bandwidth,

Market Share

Total Market Size: `25,705 crore

53.47% Tata Comm 14.58% RCom 10.29% Bharti

5.04% Vodafone

0.07% Tulip 0.18% Singtel 0.36% Equant

5.97% BSNL

2.68% 1.91% BT 1.66% Aircel Verizon 1.52% 1.01% AT&T 0.71% Idea 0.55% C&W Sify

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Highlights

V&D Estimates

constant pressure on prices and margins Voice providers should implement partnership models Rapid expansion with most global giants expanding their footprint to India Service provider should also focus on new products and applications ILD players have to bank on increasing volumes

IPLC to carriers, ISPs, content providers, and enterprises globally. Idea Cellular made significant progress in rolling out its long distance network. According to the company, as at end-March, 2012, it carried over 93% of its captive NLD and ILD outgoing traffic. SingTel recently announced to open 5 new PoPs in India. Today SingTel, through SGIPL, has got 7 PoPs in India, namely, New Delhi, Mumbai, Chennai, Bengaluru, Hyderabad, Pune, and Kolkata. They are building their 2nd PoPs in Mumbai, Chennai, and Bengaluru. British telecom has focussed elaborately on current and planned network infrastructure investments. BT still relies on its world class MPLS backbone to drive revenue in region, currently circa 45%. The recent investment in an expanded portfolio and cloud services has led to the remainder 55% of revenue coming from value added services, integration solutions and professional services. British Telecom has existing MPLS POPs in Delhi, Mumbai, Chennai, Bangalore, Kolkata, Pune and Hyderabad. The company plans to open new MPLS POP in gurgaon in quarter four of FY13. British telecom has access partners- Bharti, Tata Communications, TTSL, Tata Teleservices Maharashtra, Reliance Communications

in leased line and three Ethernet connect nodes in Mumbai, Bangalore and Chennai. Equant Networks, on the other hand, recently partnered with SITA to jointly build a global, high performance, managed cloud computing infrastructure. As a partner, Equant plans to use this infrastructure to deliver their cloud services portfolio to new markets with added global reach, reliability, and minimum latency. Also, the tier-3+ and -4 data centers (at Atlanta, Frankfurt, Singapore, Hong Kong, Sydney and Johannesburg) will be interconnected via Equantâ&#x20AC;&#x2122;s high-speed MPLS network and will enable Equant to unlock cloud computing potential at a global scale, and to offer infrastructureas-a-service and desktop-as-a-service to its APAC customers. Equant also launched the international ethernet link, an ethernet offer for large MNC customers in 40 countries and ethernet access to IP-based VPN in about 62. REVE Systems on the other hand provides software solutions for the ILD players globally. They have seen adoption increase by EU/ USA based service providers in the last year.

Slowdown Wholesale continues to be a business of scale with constant pressure on prices and margins. Despite increase in international voice traffic, legacy carriers have been impacted. Rise of OTT, VoIP carrier share is increasing as share of mobile communications continues to grow in relation to fixed voice. Today, service providers are challenged to constantly evolve their global data connectivity services to meet these different needs, yet at the same time, provide customers with the seamless global network coverage where their business is. Industry has de-grown as a result of deceleration in traffic. Loss of traffic and revenue rapidly to new non-infra players offering quality ILD services at lower costs. For the Indian ILD players, the volume of minutes into India (inbound) has shown a much higher growth than the global average. This is attributed mainly to lowering

of rates to India (currently around 0.09 USD/min), offer by many VoIP service providers like Vonage, Magicjack, Skype of unlimited India calls in their subscription packs and more minutes generated by the IP players globally for India. The ILD players have to bank on increasing volumes. The last year saw some turnsâ&#x20AC;&#x201D; where the earlier aggressive postures of players like Reliance and Bharti airtel in terms of pricing have reduced, which have benefited the industry. India attributed to one of the highest growth rates in the industry, more than 25% in the inbound volumes. So with such growth of volumes and reduced pricing pressures, ILD players should have a more profitable year in 2012.

Route to Profits The need for profitability in a largely commoditized market is making operators seek both scale and efficiency in their operations. Players need to focus on larger ethnic routes for medium term growthâ&#x20AC;&#x201D; India, China, SE Asia, large African countries, LATAM, and serve smaller ethnic markets for opportunistic trading. Improvement in speed and reliability in working with local terminators is also a direct essential tool for increasing profitability and productivity in this business for players. SPs are required to be enablers of

Market Size (in `crore) Revenue (FY 2011-12) 30,000

0.27%

15,000 25,705

25,637

2011-12

2010-11

0 V&D Estimates

VoIP peering for residential and business providers seeking native IP and introduce low-cost, high-value VAS client to enhance offering (Voicemail, Soft Phone, Presence). A service provider should also focus on new products and applications, since an increased focus on VAS like ITFS, international roaming solutions, international audio conferencing services, etc will improve margins. Services like Voice Direct could also enable companies to connect directly to access operators across the continent by paying a small transit fee and enabling direct settlements. Another way for service providers to make ILD more profitable would be to encourage outbound calling from India by urging access operators to offer breakout pricing at the retail level. Currently, zone-wise pricing does not exploit outbound calling to low-cost destinations like US, Canada. While the traditional ILD market was focused on MNCs, there has been a rapid expansion with most global giants expanding their footprints to India. The recent economic situation has also been a contributor to this trend. Over the last few years, a large number of Indian companies have also been acquiring international units or expanding their base outside the home country. This trend has given a lifeline to the international connectivity market. By implementing partnership models, voice providers can focus on their core strengths, and can become an industry that outperforms expectations. Strategic alliances and a suite of solutions that increase profitability and maximize the success of the voice business can only lead to better quality and an increase in ARPU. Wholesale traffic and revenues are not distributed evenly around the globe; certain regions account for disproportionate shares of traffic and revenues. To counter this industry phenomenon, service providers need to increase their connectivity with multiple carriers across geographies. Akanksha Singh akankshas@cybermedia.co.in

A CyberMedia Publication | voicendata.com | JULY 2012 | VOICE&DATA | 85

Broadband

Yet To Pick Pace

The voice market is saturated. Telcos are now looking at data/ broadband in a big way, with support from the government

Highlights  Broadband telephony in India

has a great opportunity  When mobile broadband picks up, there will be greater scope for development  Wireless data services has captivated a major chunk of internet customers in India  The pricing structure is high, and the usage based pricing model has in a way deterred the retail users from using latest internet multimedia services

elecommunication is significantly driving the economic and social development across the globe. The telecom industry in India had a tremendous growth last decade; this decade, the industry has transitioned from voice services to data services. The voice market has attained saturation and telecom segment along with the support of government is taking great strides towards the uptake of data/broadband. Data services is bound to contribute immensely towards building digital divide and also in enhancing ARPUs. Broadband is yet to gain traction and it is moving at a snail’s pace at present. Broadband subscription has just reached 13.79 mn in March 2012 from 16.9 mn in March 2012 (Source: Trai). Its growth has been abysmally low; in

Market Share

Total Market Size: `6,971 crore

Internet Subscribers

47.73% BSNL 16.11% Bharti

11.2% Others

86 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

terms of subscribers it had a growth rate of 14.8% in the last one year. In terms of revenues, broadband market in India is pegged at `6,971 in the fiscal year 2011-12.

9.78% MTNL 7.32% RCom 4.59% Tata Comm 1.71% You Telecom 1.56% Sify V&D Estimates

The total internet and broadband subscribers in India increased from 420.8 mn in March 2011 to 568.1 mn as on March 2012. Internet subscribers (excluding internet access by wireless phone subscribers) increased from 19.7 mn in March 2011 to 21.2 mn in March 2012. Narrowband connections are 11 mn as on March 2012 as against 7.8 mn in March 2011. Wireless data services has captivated a major chunk of internet customers in India—its users increased from 381.4 mn in March 2011 to 511 mn in March 2012.

Broadband

Top Broadband Players (FY 2011-12) Players

Revenue (in `crore)

Change (%)

FY 11-12

FY 10-11

BSNL

3,327

3,308

0.57

Bharti

1,123

1,323

-15.12

MTNL

682

579

17.79

RCom

510

598

-14.72

Tata Comm

320

239

33.89

You Telecom

119

136

-12.5

Sify

109

135

-19.26

Others

781

685

14.01

Total

6,971

7,003

-0.46

Others include: Hathway, Tikona, Beam Telecom, Quadrant, Spectranet, Asianet and Ortel V&D Estimates

As on December 2011, BSNL has 12.3 mn internet subscribers. Reliance has over 3.5 mn, Mahanagar Telephone Nigam (MTNL) has 2.5 mn, and Bharti airtel has 1.3 mn. You Broadband and Cable India has 389,983 internet subscribers. Hathway cable and Datacom has 360,571 subscribers, Tikona Digital Networks and Tata Communications have over 255,411 and 188,118 users, respectively. Beam Telecom and Asianet Satellite has 180,926 and 112,954 users, respectively. As on December 2011, the total internet leased line customers stood at 50,343 and the total cyber cafes are 7,585, according to Trai report.

Key Players The most preferred technology used by internet service providers to provide broadband in India is Digital Subscriber line (DSL) and it constitutes 85.12%. This is followed by cable modem technology (5.75%), ethernet LAN (5.09%), wireless 3.48%, leased lines (0.32%), fiber (0.23%), and others (0.01%). The state-owned Bharat Sanchar Nigam (BSNL) is offering internet access service since 2005. BSNL commissioned a multi-gigabit, multi-protocol, IP infrastructure through National Internet Backbone-II (NIB-II), that will provide services through the same backbone and broadband access network. The broadband service will be available on DSL technology

(on the same wire that is used for plain old telephone service), spanning 198 cities. NIB-II conceived by BSNL will provide infrastructure for providing number of value added services to broadband customers countrywide and to help accelerate the internet revolution in India. Bharti airtel offers broadband internet access through DSL, internet leased lines, and MPLS. It offers broadband (DSL), data and telephone services (fixedline) in 87 cities with growing focus on various data solutions for the small & medium business (SMB) segment. The company had 3.3 mn customers of which 1.4 mn

Market Size (in `crore) Revenue (FY 2011-12) 8,000

4,000

-0.46%

6,971

7,003

2011-12

2010-11

88 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

V&D Estimates

have subscribed to broadband /internet services, as on March 31, 2012. The company ended the year with non-voice revenue contributing over 50% of the total revenue. During the fiscal 2011-12, the company launched online sales as a channel for DSL acquisition and has also doubled the speeds to a minimum speed of 2 Mbps for all customers in the top 14 cities and to 1 Mbps in the balance cities with an objective of enhancing customer experience. airtel took the lead in launching 4G services in India starting with Kolkata and subsequently in Bengaluru. Besides this, it has plans to launch 4G in Karnataka, Maharashtra (including Mumbai), Punjab, Delhi, Haryana, and Kerala. MTNL provides TriBand internet services through dial-up and DSL. It provides games on-demand, video on-demand, and IPTV services in India through TriBand. It has introduced Broadband Internet access plans (TriBand) targeted at homes and small businesses. MTNL has upgraded existing TriBand (Broadband) connections for a speed of up to 2 MB/s. This service is at a cost of `55.3826 ($0.99) per month. Every additional 1 MB download over the 200 MB limit costs Rs 1.11873 ($0.02) extra. MTNL launched fiber-to-the-home (FTTH) triple-play high speed broadband service with core network speed up to 10 Gbit/s in Delhi. It is offering 3G services under the name of â&#x20AC;&#x2DC;MTNL 3G Jadoo.â&#x20AC;&#x2122; Reliance Communications offers internet access to 518 towns all with seamless handover to high speed 1x service across 24,000 towns and 600,000 villages. It expanded its CDMA wireless broadband service with a downlink speed of upto 3.1 Mbps and uplink speed of upto 1.8 Mbps. It offers the service 10. Reliance will also leverage its broadband network to support the requirements for homeland security applications and services, which can benefit from the advantages of low latency and assured quality of services that are integral to fourth generation (4G) networks. Infotel Broadband, a subsidiary of Reliance Industries, had won a 20 Mhz slot pan-India broadband

wireless spectrum (BWA) spectrum for `12,847.71 crore in 2,300 Mhz spectrum band and the company plans to roll out LTE. Spectranet has invested in its own fiber-optic network across major cities for last mile connectivity. Its solutions include Metro Ethernet (1 Mbps–1 Gbps), SDH ( E1–STM16), WiMax and point-to-point wireless. Sify Technologies’ revenues from data services has increased by 6% in FY12. YOU Broadband and cable India’s broadband infrastructure runs over 1,155 kms of optic fiber cable and 4,000 kms of last mile coaxial cable network. The company has invested around Rs 4 bn on broadband cable infrastructure. Tikona Digital Networks (TDN), is a Mumbai based internet service provider. It intends to launch TD-LTE-based 4G wireless broadband services in Gujarat, Himachal Pradesh, Rajasthan, Uttar Pradesh (East), and Uttar Pradesh (West) by the end of October 2012. Hathway provides cable services in 125 cities while broadband services are provided in 18 cities. Hathway also has 68 analog head ends, 19 digital head ends, and a 15,000 km hybrid fiber co-axial cable network.

Prospects The coming year will be great for broadband, there are quite a few significant strides being undertaken by the government. National Telecom Policy 2012 has ‘Broadband on Demand’ vision and intends to leverage telecom infrastructure to offer internet and web economy in order to ensure equitabe and inclusive development across the country, both in rural and urban areas. Broadband is gaining popularity across the globe clearly – it is ‘speed’ that is going to be the killer app to excite cus-

tomers with a compelling experience. Broadband telephony in India has a great opportunity. 4G LTE will rule the wireless broadband service. NTP 2012 aims to strengthen e-governance and mobile governance in key social sectors such as health, education, and ag-

National Telecom Policy 2012 has ‘Broadband on Demand’ vision and intends to leverage telecom infrastructure to offer internet and web economy in order to ensure equitabe and inclusive development across the country, both in rural and urban areas

riculture. Government envisages to offer citizen centric democratic governance through the help of technology. Government intends to provide affordable and reliable broadband-on-demand by 2015 and to achieve 175 mn broadband connections by 2017 and 600 mn by the year 2020 at minimum 2 Mbps download speed and to make available higher speeds of at least 100 Mbps on-demand. This opportunity is going to be great boon for other internet service providers in India. Government has already set to provide national optic fiber network to all village panchayats by 2014. It has a dream to provide broadband access for all by 2020. These prominent initiatives will throw open umpteen opportunities in the Indian broadband market. Broadband is the key driver for many other technologies. Industry consensus that India would become the second largest mobile broadband market globally, when mobile broadband picks up there will be greater scope for development. At present, internet growth in India is sluggish for both retail and enterprises. The pricing structure is high, and the usage based pricing model has in a way deterred the retail users from using latest internet multimedia services like VoIP, video sharing, streaming etc. Poor quality of service is also one of the critical deterring factors. Demand in India is driving the broadband market, it will become more exciting due to more coverage and competitive pricing. It will offer good returns as compared to voice services. Broadband market is strengthening day by day in all terms of subscribers, technological advancements and spending on it. And India is completely set for a great broadband story, we need to wait and watch as to how it develops. Malini N malinin@cybermedia.co.in

A CyberMedia Publication | voicendata.com | JULY 2012 | VOICE&DATA | 89

VSAT

On the Fast Track

Banking and finance rocked the VSAT industry in FY12 with steadfast deployments Highlights  Banking and Finance have been 



SAT deployments in FY12 showed prominent growth taking overall revenue for this industry to `500 crore. The industry registered close to 6% growth while showing prominent developments last year. These include, first use of Ka-band spectrum (18-28 Ghz), on-the-move mobility applications for voice and video, large scale adoption for ATMs by white label and managed service providers, enhanced VSAT CPEs for security, routing, and multi-service integration business continuity through dual Hubs.

Market Scan First in the lead is Hughes Communications. The company registered a whop-

ping 18.4% growth with total revenue clocking `167 crore for FY12. Hughes bagged an order to provide network connectivity for police stations across 400 locations in Jharkhand. It also provided satellite based ‘receive only terminals’ (rots) network for Edusat project of the Government of Punjab. State Bank of India gave Hughes an order for setting up 2,000 sites recently. Hughes also bagged the contract for Jaipur Vidyut Vitran Nigam (Jaipur Discom) in Rajasthan under which Hughes will provide broadband satellite services connecting 825 locations. The second contract was awarded for the 5 utility companies in Karnataka (BESCOM, CESCOM, MESCOM, GESCOM, and HESCOM) to deploy a network of 713

90 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

the major growth drivers in FY12 Rural Penetration for CSCs APDRPs is already gaining grounds Panchayat connectivity, RRBs, ATM Digital Cinema and Signage, shall drive the growth for VSAT industry On-the-move mobility applications for voice and video are growing Enhanced VSAT CPEs for security, routing and multiservice integration, dual hubs and adoption of Ka Band are new key trends

satellite terminals where Hughes is the secondary network bandwidth service provider. The mandate for Hughes across both states is to expand the R-APDRP solutions platform to urban as well as rural areas. The Rajasthan and the Karnataka agreements have been signed on for 3 years and 5 years, respectively. Also, Hughes has received approximately 5,000 orders from January 2011 till now for setting up VSAT terminals of ‘Brown Label’ ATMs’ service providers across the country. Second is Bharti airtel. Even though the company witnessed flat growth in VSAT with `107 crore in FY12 as compared to `95 crore in FY11, Bharti airtel has deployed VSATs (13,000+) for Gu-

VSAT

Top VSAT Players in Revenue Terms (FY 2011-12 in crore) Players

FY11-12

FY10-11

Change (%)

Hughes Communications

167

141

18.4

Bharti airtel

107

12.6

Tatanet

9.1

HCL Comnet

-6.0

Essel Shyam

-20.0

BSNL

5.0

Others

-25.0

Total

500

471

6.2

Others include: Infotel Satcom,GNFC V&D Estimates

jarat for its E-gram project. In addition to large statewide deployments, it has also installed services for large private and public sector banks for their branch connectivity and for carrying critical core banking applications. In FY12 airtel focused to further build around available infrastructure by deploying technologies like Gilat Skyedge2. Tatanet deployed 129 VSAT stations as part of the optimum seismological network for Indian National Center for Ocean Information Services (INCOIS). Tatanet’s revenue clocked `84 crore showing a growth of 9.1% in FY12. The company has bagged an order for 3,000 VSATs from Wipro to be deployed as part of the financial inclusion project managed by this nodal agency (NABARD). Also, Tatanet installed connectivity for close to 4,000 ATMs managed by service providers like Prizm Payments, Tata Communications Banking Infrastructure (TCBIL), Euronet, FIS, and AGS. Essel Shyam, even though with not much addition to the VSAT deployments, has bagged a few projects to its credit in FY12. It deployed a VSAT network for North Eastern Electric Power Corporation (NEEPCO) project and for deep water resources (ONGC). The company showed a degrowth of 20% last year.

Growth Drivers Banking and finance have been the major growth drivers with applications—ATM and core banking—driving numbers. Key projects have been NABARD where system integrators namely, Wipro, CÃ-Edge undertook to roll out about 5,000 VSATs for rural branches of cooperative banks. Last year PSU banks went slow on ATM deployment due to a decision of

Market Share

Total Market Size: `500 crore

33.4% Hughes Communications

21.4% Bharti airtel 16.8% Tatanet 15.6% HCL Comnet

4.2% BSNL

92 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

5.6% Essel Shyam

MoF to consolidate the ATM procurement across all PSU banks. These statespecific tenders are expected to provide a major fillip to the VSAT industry, with a significant portion of the 60,000+ numbers being deployed on VSAT in the current year (FY13). Beyond the above, multi cast has been the major driver for VSAT sales. Thus, projects leveraging on this one feed beam to ‘unlimited’ locations at a flat annualized cost has enabled applications like digital cinema, distance learning to leverage VSAT networks. On the manufacturing and distribution front, VSATs are increasingly being used as back-up medium for business continuity. The oil & gas sector has been a major driver of bandwidth sales for VSAT service providers. Tatanet runs a Earth station based on i-Direct technology which is the leading platform for this sector. The VSAT connectivity space has been dominated by institutional financial inclusion projects. Reaching out to the unserved and underserved at a reliable but an economical cost, leads to VSAT as the chosen mode of connectivity. Deployments such as VPN & internet services in different flavors, varying from pooled bandwidth to bandwidth-on-demand, is gaining popularity. Availability of VAI (value added internet) with applications like media, videoconferencing, tele-education, medicine presents an interesting proposition for VSAT industry in the consumer/SOHO segments. Accelerated VSAT as a product, which is something new in the market, was built to kill the slowness of applications on VSAT. Going forward, bandwidth-on-demand and value added services of airtel will contribute and drive the demand for VSAT. Also, with the increasing thrust on internet penetration in India, we can look forward to similar trends in the future.

Innovation at its Peak 3% Others

V&D Estimates

Many new innovations in VSAT industry were seen in the last year. These included the �� use of smaller antenna for easier VSAT terminal deployment, use

Volume 1

RANKINGS

Volume 3

Carrying on with the legacy of the original Top 20 rankings, this issue will rank the Top 200 players in the Indian IT Industry on the basis of their revenue.

Volume 2

VERTICALS

NEW

DQ Top 20 is the ultimate source when it comes to supply side dynamics of the Indian IT Industry. This year, we are completing the offering by adding the demand side. Verticals will give a through view of how various industries are leveraging IT for driving growth, efficiency, customer satisfaction- and are creating value for themselves.

INDUSTRY This issue will contain all that one needs to know about different segments and sub segments of the Indian IT Industry, with all the number, quantitative analysis, the trends, and what is likely to come in the years that follow.

Event

DQ Awards Indian IT as any other industry has witnessed individuals or organizations that have made a difference to this community. DQ Awards recognizes, facilitates and honors the contribution of those who are achievers and contributors to the growth and development of the Indian IT. Inviting you to participate in the countryâ&#x20AC;&#x2122;s oldest and most comprehensive IT industry survey â&#x20AC;&#x201C; DQ Top 20

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VSAT

Top VSAT Players in Number Terms (FY 2011-12) Players

FY11-12

FY10-11

Change (%)

Hughes Communications

55,803

44,500

25.4

Bharti airtel

46,895

43,912

6.8

HCL Comnet

23,922

25,427

-5.9

Tatanet

20,884

16,100

29.7

BSNL

9,269

8,200

13.0

Essel Shyam

2,743

2,728

0.5

Others

3,047

1,980

53.9

Total

162,563

140,867

15.4

Others include: Infotel Satcom, GNFC

Reaching out to the unserved and underserved at a reliable but an economical cost, leads to VSAT as the chosen mode of connectivity

V&D Estimates

of enhanced CPEs for better security, throughput and triple-play integration, use of latest coding for higher bandwidth, mobile VSATs for use in strategic areas like police, railways, defense, multiple warehouses for faster deliveries, and installation tools integrated on mobile phones and iPads. Even though terrestrial links have brought down the cost of bandwidth, there are several areas where shared bandwidth leads to lesser cost compared to terrestrial bandwidth. These areas are e-learning, rural communication market, banking, oil & gas exploration, e-governance, and healthcare. The technical modifications required are those technologies which have a very strong QOS capability and reduce the idle bandwidth on the users’ CUG bandwidth hired by the customer. At the same time they should also take care that innovative technology better suitable for a particular kind of application is used. These technologies are slowly coming into the market and being accepted by the users.

transponders from ISRO to the industry, latest Ka-band satellites not being available in the country, continuation of the obsolete ‘Closed User Group’ definition for VSAT services, etc. USO Fund is also not being given to VSAT technology where natural use is for rural services. Other issues include permitting ‘open skies’ for free access to global satellite transponders, permitting smaller antenna size (0.74 m) for Ku-band as per international norm, and reduction of revenue share/service taxes for services in rural areas.

Market Size (in `crore) Revenue (FY 2011-12) 5000

250

6.2%

500

471

2011-12

2010-11

Hiccups Most of the issues being faced by the industry are a result of government processes or policies. These include availability of spectrum from ISRO (Ku, Ext-C band), severe crunch in getting

94 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

V&D Estimates

Key Trends As mentioned earlier also, addressing various challenges with innovative technologies in VSAT industry is bringing down the cost of ownership and improved bandwidth on the given spectrum. The state of technologies which will enable this are:  Ka Band: Ka band can be considered the future. It will have very high bandwidth over VSATs, whose drastically reduced prices will make VSAT a competition to the terrestrial service providers  Carrier in Channel Multiple Access: This is a bandwidth saving technology which exploits the excess power available with the satellites and reuses the bandwidth again, which effectively is twice the bandwidth that has been leased  Improved Encoders for Broadcast and DTH Markets: The latest encoders have greatly reduced the bandwidth required over the air. This effectively means better quality of video transmitted with less bandwidth  SCPC Return with DVB-S2: This type of combination is suitable for high bandwidth requirement and also realtime applications, and still be able to reduce the total cost of ownership. Akanksha Singh akankshas@cybermedia.co.in

V&D

TOP10 Club Bharti Airtel....................................................................................................96 Vodafone . ......................................................................................................100 BSNL ..................................................................................................................102 RCom..................................................................................................................105 Idea Cellular.................................................................................................106 Tata Communications................................................................................108 Tata Teleservices.........................................................................................112 Aircel................................................................................................................114 MTNL...................................................................................................................116 TTML...................................................................................................................118

Bharti airtel

‘The planned capex outlay for FY13 is $2-2.2 bn’

ig Drop in Capex Spending Given the growing cost and pricing pressures during the last financial year, we as a business have had a concerted focus on enhancing capital productivity and monetizing existing assets through an opex-led model vs a capex model. This, along with a cautious outlay of the capex, enabled the company to enhance the capital productivity for India and South Asia. Capex Spending for FY13 The planned capex outlay for FY13 is $2-2.2 bn for India and South Asia. Focus is on strengthening 2G network in rural areas, expanding the reach of 3G services and making the service experience more seamless, and expanding 4G to more circles. Overall, we will continue our investments in creating backhaul to address the requirements of India’s voice-to-data journey. Plans Regarding airtel Money Following an initial promising response in the pilot phase across Delhi-NCR and Chennai—airtel money is now available for customers pan-India. The company has also announced a partnership with Axis Bank towards extending banking and payment services to India’s unbanked. With these launches, our target is to create a state-of-the-art payment infrastructure on mobile, compliant with all regulatory guidelines that are compatible across multiple channels. 3G Subscriber Base We have expanded our 3G services to over 1,100 cities and now have over 9 mn 3G subscribers provisioned on our network—with an even stronger improving active base, contributing sustained quality ARPU, and improving usage month on month. Looking ahead, we see tremendous opportunity in data. BWA Plans airtel took the lead in launching 4G services in India starting with Kolkata and subsequently in Bengaluru. Besides this, we have plans to launch 4G in Karnataka, Maharashtra (including Mumbai), Punjab, Delhi, Haryana, and Kerala. With Qualcomm’s BWA acquisition, Bharti has secured a nationwide broadband leadership through a combination of 4G and 3G in 18 circles. This partnership will combine the strength of Bharti’s national telecom footprint and Qualcomm’s technological leadership in the LTE space.

—Sanjay Kapoor CEO, India and South Asia, Bharti airtel

96 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

Decline in Non-voice Revenues The decline in SMS revenues is an industry-wide phenomena and is a result of the recent Trai recommendation casting major restrictions in terms of sending more than 200 SMSs. The implementation of our ‘no negative charging’ plan was purely to enhance customer experience on VAS, which has resulted in marginal impact on revenues. We are confident that this initiative will have a positive bearing on business in the long run.

Top 10

Worrying Time Despite a decent growth in revenue, the gradual and consistent dip in net profit has been an area of concern for airtel in the last fiscal

he leader in the Indian telecommunications services industry, Bharti airtel, retained its leadership position in the VOICE&DATA 100, 2012 survey. The company posted a revenue of `71,451 crore in FY12 from `59,538 crore in FY11, showing a strong growth of 20%. By the end of the last fiscal, the company expanded its business operations to 20 countries including India, Sri Lanka, Bangladesh, and Africa. In India and many parts of Africa, the company also rolled out 3G operations during the last financial year. Subscriber wise, the company had accumulated more than 251 mn in FY12 from 221 mn a year back, though this growth is much slower than what the company witnessed in FY11. This slow growth can be attributed to the increasing saturation level of new mobile subscribers in the country and partly for Bharti’s tariff hike in India in the last fiscal. Of this 251 mn subscribers, India contributed more than 181 mn and the company covers around 86% of the country. By the end of 2011, the operator has its networks in 454,302 towns. Its optical fiber reach covers 157,886 kms asm of March 2012 for providing national long distance services. During the same period, airtel had around 1.9 mn fixedlines users and 1.4 broadband subscribers on DSL technology. The company’s broadband and fixedline services that comes under its Telemedia services saw a very insignificant growth of just 3% during the last fiscal. Revenues from the Telemedia services clocked `3,727 crore in FY12 from `3,632 crore in FY11. airtel digital TV that falls under the

1 company’s digital services, has 7.2 mn customers on its Direct-To-Home (DTH) platform and offers a total of 310 channels including 14 HD channels and 7 interactive services by the end of the last fiscal. This segment posted a good growth in the last fiscal bringing revenue of `1,296 crore in last fiscal compared to `776 crore in FY11, showing a growth of 67%. On human resources front, the company has reduced its India workforce by close to 2,000 to have a total

Revenue

FY 2011-12 (in ` crore) 20%

71,451 59,538

2011-12

2010-11 V&D Estimates

of 14,935 employees by March 2012. Bharti seems to be getting more aggressive in acquiring new subscribers, going by the telecom industry’s subscriber addition figures for the month of January. It added 1.3 mn subscribers last month, after 4 successive months of relatively sluggish subscriber addition figures of less than 1 mn. Between September and December 2011, the monthly average subscriber addition figures for the company stood at 0.95 mn, accounting for less than 14% of the monthly average subscriber addition of 6.97 mn for the industry. Though, Bharti airtel made some sweeping moves in its business areas including India and Africa, as well as by signing various agreements relating to operations, customer service, innovation, and technology in the last fiscal, but these moves failed to put the telecom giant on growth road. Looking at the snapshot of the various quarters of FY12, in terms of net profit, the company saw a gradual and consistent fall in its net profit not only in the last fiscal but also in the FY11. The net profit for the company for the last fiscal was not even a billion dollar. The company has also been seeing dip in revenue market share over the last 2 years, Bharti airtel has now gained back some lost ground. The country’s largest mobile services operator, by revenue and subscriber base, clocked a revenue market share of 30.8% of the Indian telecom market—a gain of 60 basis points (0.6%) during the April-June quarter against the 3 months ended March 2011. Its almost 2 years since Bharti got the 3G license but the uptake has been poor so far and ARPU is not up to the mark. Again, the lack of innovation in offering 3G services, both in terms of tariff and attractive applications, rendered the firm with just 3 mn 3G subscribers. Hence, for fall in the net profit and the dwindling market share and subscriber base which might be just a matter of time, this large telecom behemoth needs to take some harsh steps to maintain its position in the global as well as domestic map.

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Vodafone India

‘Our business services contributes 9% of our total revenues’

apex Spending Over the last couple of years, we have invested heavily in building our network in the country with a capex of over `6,000 crore per annum. We have a pan-India presence and have built over 110,000 sites. We have also invested in 3G and development of data services for the benefit of our subscribers. We have contributed over `50,000 since 2007. M-paisa Launch Nationally We pioneered the launch of financial inclusion through mobile banking with the launch of our globally recognized product m-paisa in Rajasthan. From the success of a trial in Rajasthan, we believe we have a successful model to be rolled out nationally. 3G Performance Over the last couple of years, data growth has been phenomenal for the industry. With 3G network expansion undertaken by all operators, 3G penetration is steadily growing. The ecosystem of 3G and the smartphone users in the country are fairly low, leading to slow uptake of 3G services. We now expect that the low cost 3G smartphones will contribute to faster 3G adoption by subscribers. We have over 1.3 mn 3G subscribers and we are steadily making inroads in growing this base. ILD Performance Wholesale ILD industry in India is pegged at `10,543 crore and Vodafone’s ILD revenue market share was around 10%. Wholesale traffic and revenues are not distributed evenly around the globe; certain regions account for disproportionate shares of traffic and revenues. To counter this industry phenomenon, we increased our connectivity with multiple carriers across geographies. Uptake on Business Services Vodafone Business Services (VBS) is a key growth driver of our business strategy and we have made substantial investments to grow this business. VBS is a growing business and contributes around 9% of our total revenues. Since inception, Vodafone business services has garnered over 3 mn corporate customers in India and currently provides services to over 60,000 global and national businesses.

—Marten Pieters MD & CEO, Vodafone India

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Increasing Non-voice Revenue Our non-voice revenues are similar to the industry trends. We expect the contribution of data revenue to grow over the course of next few years. India has a huge prepaid base, relatively low penetration of smartphones and low broadband penetration, leading to slow data adoption. Things are changing now with basic internet on mobile picking up fast and the internet experience available even on feature phones at very affordable prices. With 3G prices being made more affordable, adoption for data and 3G will go up.

Top 10

Gains Despite Hiccups FY12 was good in terms of subscriber base as well as revenue but the company remained entangled in the 5-year-old tax case

or Vodafone India, FY12 ended on a mixed note. The company grew phenomenally both in terms of subscriber base as well as revenue but remained entangled in the 5-year-old tax case. Vodafone India, by the end of March 2012, added close to 16 mn new subscribers reaching a total of 150 mn figure, growing at 11.8%. It became the third player to touch the 150-mn subscriber mark after Bharti airtel and Rcom. The company’s service revenue grew by 19.5%, driven by an 11.8% increase in the customer base, strong growth in incoming and outgoing voice minutes, and 51.3% growth in data revenue. 3G services were available to Vodafone customers in 860 towns and cities across 20 circles on March 31, 2012. The company’s growth also benefited from mobile operators starting to charge for SMS termination during the second quarter of the 2012 financial year. In terms of revenue, the company grew by 25% to register revenues of `34,099 crore in FY12 compared to `27,348 crore in FY11. And the company grew substantially in all its business units like voice, messaging, fixedline, and data services. On March 31, 2012, the customer base had increased to 150.5 mn, with data customers totaling 35.4 mn, a y-o-y increase of 81.5%. This was driven by an increase in data enabled handsets and the impact of successful marketing campaigns. Whilst the market remains highly competitive, the effective rate per minute remained broadly stable during the year with promotional offers offsetting headline price increases. The company had 1.3 mn 3G customers by the end of the last fiscal. The company also increased its mobile commerce presence in the country and launched m-paisa in Rajasthan and is planning to make it a pan-India service

2 in this fiscal and would launch services in phases. The company also tied up with World Space Radio in its 18 operating circles. Vodafone India customers, through this service, will have access to all the genres of music round-the-clock, ranging from old Hindi films to regional folk songs and ghazals. This service also offers song collections around various themes that include love songs, sentimental gems, and artiste specials that users can browse through to enjoy at their convenience.

Revenue

FY 2011-12 (in ` crore) 24.7%

34,099

27,348

2011-12

2010-11 V&D Estimates

Vodafone India has also tied up with Timbre Media in association with Saregama to provide its customers with the best of radio/music programming and sound packaging. Timbre Media specializes in genre based radio programming in popular songs and ghazals in Hindi (old and new), international music, carnatic & hindustani classical, songs in regional languages, spiritual songs, and wellness content. In a significant move, on 1 July 2011, Vodafone Group and the Essar group agreed the terms under which the Essar group would dispose of its entire interest in Vodafone India (VIL). The parties also agreed to cooperate fully in seeking all regulatory approvals necessary for the completion of the transactions and the Essar group will relinquish all of their board seats in VIL. Under the terms of the agreement, Essar Communications and Essar Com, sold their entire 22% shareholdings in VIL to Vodafone Group taking Vodafone Group’s direct shareholding to 64.4%. The total cash outflow from Vodafone Group was $4.2 bn (£2.6 bn), comprised of a net payment of $3.3 bn (£2.0 bn) after withholding tax of $0.9 bn (£0.6 bn). The transfer of these shares to Vodafone Group was completed in 2 tranches on June 1, 2011, and July 1, 2011. Under a separate agreement, ETHL Communications Holdings sold its 11% shareholding in VIL in 2 equal tranches to Piramal Healthcare, completing in August 2011 and February 2012. On 20 January 2012, the group received the judgment of the Indian supreme court on the Hutchison-Vodafone buy-out case pertaining to Vodafone’s tax liability. The court concluded that Vodafone had no liability to account for withholding tax on its acquisition of interests in Hutchison Essar (now VIL) in 2007. However on March 16, 2012, the Indian government, through its budget announcement, proposed new retrospective tax legislation, which if enacted, would countermand the verdict of the Indian Supreme Court and impose tax interest from 2007 and potentially, penalties on Vodafone International Holdings BV (VIHBV), notwithstanding the verdict of the apex court.

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BSNL

‘We have master service agreements with 9 operators’

G Performance As on March 2012, BSNL’s 3G services is available in 963 cities and to all its mobile GSM customers.

BWA Plan BSNL has already launched BWA (WiMax) services in rural areas to provide wireless broadband connectivity to rural CSCs and village panchayats for government programs. Further, BSNL has also provided WiMax services in 169 towns of Kerala and 50 towns of Punjab circle. Fixed Broadband Performance The total number of broadband connections is approximately 9 mn and this was possible because of timely arrangement of inventory and introduction of various innovative value added services like games on demand, music on demand, and education on demand in rural areas. Update on Enterprise Business The enterprise business has been growing in the past few years as we have made it a separate business unit. In FY12, we achieved revenues of `2,985 crore. Further, we have penetrated 360 gold and platinum accounts in FY12. For FY13, the company is looking at revenues of `3,561 crore. Tower Sharing Agreements BSNL has signed master service agreement (MSA) with 9 operators—airtel, Aircel, RCom, Videocon, Etisalat DB, Loop Telecom, Sistema Shyam, Idea Cellular, and Vodafone for leasing out BSNL towers on a pan-India basis. As on March 31st, 2012, BSNL has leased out 1,441 number of sites to other service providers. Non-voice Contribution BSNL earns about `120 crore per month from pure VAS, P2P, and data and this contributes around 13%. Innovative Business Model For FY13, the company is focusing on utilization of land and buildings for call centers/BPO/software park, tower monetization, utilization of telecom factory infrastructure for revenue generation, broadband connectivity to schools, establishing Wi-Fi network with the help of partners, and leasing out CDMA EV-DO network.

—RK Upadhyay CMD, BSNL

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NOFN Project BSNL has 700,000 Rkm of OFC routes countrywide and a major part is in the rural areas. This network largely overlaps all other fiber networks of various operators and is spread out in most of the 6,500 blocks of the country. BSNL’s fiber connectivity is already available in about 60,000 panchayats out of 2.5 lakh panchayats in the country. Recently, the government has identified Arain Block in Ajmer district for a pilot roll out in its 30 panchayats.

Top 10

Bouncing Back The company has not done well on topline but has improved considerably on bottomline

t was a make-or-break year for BSNL but the company fared very well. On revenue terms, the company has shown a drop in revenue from `29,688 crore in FY11 to `28,447 crore in FY12 but on the PAT (profit after tax) front, the company has improved significantly by netting `8,347 crore visa-vis `6,384 crore in FY11. The company has done extremely well on mobile and NLD services. On the mobile front, the company has increased its revenue by 31% to net `6,482 crore. With respect to NLD services, the company has increased its revenue by `698 crore to net `5,646 crore. On mobile services, the company is doing extremely well and 3G services are now available in 963 cities and the services is available to all its mobile customers. Presently, non-voice contributes around 13% of the overall mobile revenue and the company plans to increase it by entering into non-exclusive agreements with VAS players. On the capex front, the company has invested `5,000 crore in FY12 for ongoing GSM, broadband, and fiber-to-the-home projects but this year the company plans to invest `9,086 crore and more focus is on mobile and broadband services. Recently, BSNL has finalized 10.15 mn GSM line order to ZTE worth `3,200 crore for northern and southern zones. The order is planned to be executed within one year for both 2G and 3G services and will involve planning, financing, engineering, supply, installation and testing, commissioning and annual maintenance of GSM lines. On the broadband front, the company is the undisputed leader with more than 9 mn subscribers thanks to the timely availability of equipment and introduction of VAS services like games on-demand,

3 music on-demand, education on-demand, and others. The company has also launched BWA services in rural areas of the country for connecting rural CSCs (common service centers) and village panchayats for the government program. Presently, WiMax service is operational in 169 cities of Kerala and 50 cities of Punjab. In future, the company doesn’t want to operate BWA service in all the circles but plans to be selective.

Revenue

FY 2011-12 (in ` crore) -4.2%

29,688 28,447

2011-12

2010-11 V&D Estimates

The company has been identified for NOFN project due to its reach and fiber resources. It has 700,000 km of optical fiber routes countrywide and a major part of it is the rural areas. This network largely overlaps all other blocks of the country. BSNL’s fiber connectivity is already available in 6,000 panchayats out of 2.5 lakh panchayats in the country. On the enterprise part, BSNL has transformed a lot. The company is aggressively looking at the enterprise market in a big way by imparting training to the teams, focusing on solutions, and account expansion. The company is providing end-to-end communication solutions to government departments, PSUs, banks, airlines, and corporates in big way. Some of the projects bagged by the company include: CCTNS project, department of justice project for connecting all the courts in India, and NME-ICT project for providing internet bandwidth to colleges. In terms of numbers, BSNL’s enterprise has done well as the company has bagged orders worth `2,985 crore and plans to achieve revenues of `3,561 crore in FY13. To give a big push to the enterprise division, the company has established 9 IDCs (internet data centers) to be used for colocation, hosting, managed services and cloud services along with Sai InfoSystems and Dimension Data. In its quest to generate additional revenue, the company has signed master service agreements with 9 operators on a pan-India basis. Till date, the company has leased out 1,526 sites and plans to lease 3,000 BTS tower sites in FY13. Apart from this the company is also looking at utilization of land and building for call centers/BPOs, utilization of telecom factory infrastructure, broadband connectivity to schools, establishing Wi-Fi network, and leasing out CDMA/EV-DO network. It’s a good beginning for the company as the Indian government has identified BSNL as one of the three players to deploy NOFN (national optical fiber network) due to its reach and fiber resources. The company is awaiting commercial clearance for doing a pilot in Arain Block of Ajmer district of Rajasthan which will cover 30 panchayats. All this holds a lot of promise for BSNL in the future.

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RCom Top 10

A Tough Year A troubled period that saw RCom get into losses and debt, restructuring, and alleged involvement in the 2G scam

or the country ’s second largest telecom operator by subscriber base, Reliance Communications, year 2011 was something that the company would not like to relive ever. Though it crossed the 150-mn subscriber mark during that period, revenue wise it was badly hit. It closed the FY12 with `20,382 crore from `23,107 crore in FY11, and the company’s net profit is also on a downslide since the last few quarters. And it was not just the revenue that the company was worried about. Issues like management shake-up, restructuring, alleged involvement in 2G scam, and huge debt have shown the cancerous effect on the company. By the end of the last fiscal, the company has a net debt of close to `36,000 crore. The company’s ARPU for the reviewed period has come down to `102 from `116 a year ago, the average minutes of usage (MoU) per subscriber also went down to 230 minutes per month from 262 minutes per month a year ago. Overall, the company’s net profit has come down to `929 crore in FY12 from `1,346 crore in FY11. During the last fiscal, owing to various inter-related issues, the company decided to restructure its business and brought its GSM, CDMA, and WebWorld services under one business unit—Wireless, and its national and international broadband business in to another unit—Global Enterprise Business. From a revenue point of view Rcom’s wireless business unit contributes close to 61% its total revenue and global business, 35%. The wireless business revenue clocked `17,695 crore in FY12.

4 In the second quarter of the last fiscal, the company bagged the largest order for outsourced data center facility in India for `1,400 crore. RCom has signed a deal for building and maintaining a data center for HDFC Bank. The deal is the largest outsourced deal in this sector and would span a period of 15 years. The data center will house equip-

Revenue

FY 2011-12 (in ` crore) -11.8%

23,108 20,382

2011-12

2010-11 V&D Estimates

ment possessing highest computing power in the industry in India. Reliance is proposing to build a new facility, creating space of over 350,000 sq ft. The phase I of 100,000 sq ft will be ready in 12 months and the complete data center would be ready in 24 months. This would also be the new cloud computing center. Reliance Globalcom has added 400 GB of capacity on Europe–Gulf route during the period. It has upgraded capacity on Flag Europe Asia (FEA) and FALCON Cable Systems to over 500 GB. The 400% upgrade in the undersea FEA cable system capacity. In the Q3, RCom tied up refinancing for maturity value of outstanding FCCBs (Foreign Currency Convertible Bonds) of $1.18 bn. The refinancing is being funded by ICBC, CDB, and EXIM and other banks. In total, the company invested more than `90,000 crore for the network expansion for all its business units. Rcom has completed the rollout of 3G services in all circles where it has 3G spectrum, covering over 333 towns. On CDMA platform, Netconnect Broadband+ service is available in over 1,000 cities with seamless handover to 1x service across 20,000 towns. The company also became the first operator to launch a tablet with bundled service offer in the country when they launched the Reliance 3G Tab. Rcom also launched another tab on CDMA technology the next quarter. By end of the last financial year, the company’s Digital TV was available at more than 40,000 outlets across 8,300 towns in the country and has around 4.3 mn subscribers. On the positive side, the company’s quality of services improved in the last year and as per Trai QoS report published in April, 2012; Rcom has met Trai’s QoS criteria in all the 22 circles. Moreover Trai has rated Rcom’s network as #1 in 18 out of 22 circles for ‘Lowest Call Drop Rate’ across operators and also rated amongst Top 3 in 18 out of 22 circles for ‘Best Call Set-up Success Rate’.

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Idea CELLULAR

‘We offer broadband in 3,000 towns &10,000 villages’

erformance in FY 2011-12 Idea has been the most consistent performer in the Indian telecom sector, and grew its revenue market share (RMS) by 1.4 percentage points y-o-y, closing FY12 at 15% RMS. Idea continued its enviable 4-year track record of being the fastest growing Indian mobile operator, with FY12 gross revenue growth of 26% y-o-y, nearly double the wireless industry growth rate. Idea reported highest VLR percentage at 93%, and is now ranked 3rd in the industry in terms of total base of active subscribers. Idea’s thought leadership on Mobile Number Portability (MNP) and 3G further consolidated the company’s competitive standing. So far, over 3 mn users have chosen to port to Idea via MNP, the highest in the industry. The company now has over 83,000 2G sites and over 12,800 3G cell sites. Idea’s service center network now covers over 3,870 exclusive outlets and over 680 special 3G experience zones. Today with 3 mn shareholders, 116 mn customers, and 7,661 employees, we are confident that the company will not only tide over the current regulatory headwinds, but further consolidate its position and emerge stronger. Capex Spending The total capex during FY12 was `4,250 crore. Major investment was made in setting up 3G network. Capex guidance for FY13 stands at `3,500 crore, excluding any payment towards spectrum. Mobile Money Pilot The pilot project is still underway. We will announce the commercial launch when we are ready. 3G Coverage Over the last one year, Idea has been spreading 3G coverage across the country. Idea’s high speed broadband services are now available in over 3,000 towns and 10,000 villages across 20 service areas, including 3G roaming arrangements. Data Services Initiatives Ever since 3G was launched last year, there has been a steady rise in uptake of data services, and it now contributes 14.3% of the company’s revenue, which is amongst the highest in the industry. The company had 2.6 mn active subscribers on 3G platform with an average usage of 315 MB per month and 3G data incremental ARPU of `91. To drive usage of data services, Idea has launched a range of affordable 3G smartphones in the price bracket of `5,000 to 8,000.

—Himanshu Kapania MD, Idea Cellular

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NLD and ILD Performance Idea has pan-India coverage with around 65,000 Rkm of own built fiber cable transmission network and additional IRU arrangement with other telecom operators. The company is also expanding OFC PoPs and presently has over 1,700 PoPs in 128 cities and linked highways. Idea’s NLD ad ILD network currently carries over 93% of captive NLD and ILD outgoing minutes.

Top 10

Getting Bigger Innovative advertisements and attractive handset packages are helping the company get 3G customers

dea crossed the 100 mn mobile subscriber base mark in the fiscal. The company added 23.2 mn subscribers taking the overall tally to 113 mn customers. On the 3G front, the company is strengthening itself. Presently, the high-speed broadband services are available in 3,000 towns and 10,000 villages in 20 service areas (including roaming arrangements). The company is accelerating the deployment of 3G ecosystem by launching Idea branded 3G handsets. This strategy will help the company build channel competencies as in the future, more mobile devices based on wireless data services will be the order of the day. The company is also focusing on ensuring the availability of handsets in smaller towns giving consumers the choice to go for replacement and opting for 3G handsets. Focus is also on creating relevance of 3G services for the customers by finding the right kind of applications and offering the right kind of content. Idea has 2.6 mn active subscribers on 3G platform with an average usage of 315 MB per month. These customers naturally have a higher ARPU as their voice and VAS needs are different vis-a-vis the 2G subscribers. Non-voice revenue for the fiscal stands at 14.3% and has increased by 2.2% with respect to FY11. Idea has extended its overall MNP leadership position with a net gain of 2.9 mn customers from other operators, with one out of every four existing mobile customers who chooses to port out, preferring Idea. On the revenue front, the company has grown by 26% and netted revenues of `19,489 crore. Of this, mobile con-

5 tributes the maximum followed by passive infrastructure and then the ILD segment. PBT (profit before tax) for the fiscal has grown by 5% to register `1,055 crore vis-a-vis `997 crore in FY11. On the overall capex front, the company has invested `4,250 crore in FY12 whereas capex planning for this fiscal stands at `3,500 crore. In terms of

Revenue

FY 2011-12 (in ` crore) 26.2%

19,489

15,438

2011-12

2010-11 V&D Estimates

infrastructure, the company currently has around 65,000 Rkm fiber cable transmission network for tapping wireless broadband. Idea is also expanding its optical fiber cable PoPs (point of presence). Presently, it has over 1,700 PoPs in 128 cities and linked highways. The OFC network helps the company to serve 2G/3G/NLD/ILD/ ISP/wireless broadband subscribers’ needs. On the NLD front, the company currently carries around 93% of Idea’s captive NLD minutes and handles over 95% of captive ILD outgoing minutes. And the focus is on expanding both NLD and ILD capacity to meet future requirement. The company has almost doubled its 3G cell sites and by the end of the last fiscal, it was at 12,825 sites whereas 2G cell sites stands at 83,190. Idea Cellular is known for its innovative advertisements and the company bagged the Effies Gold and Silver 2011 for the ‘No Idea, Get Idea’ and ‘Break the Language Barrier’ brand campaigns. Idea’s innovative series on MNP through ‘No Idea, Get Idea’ advertisements highlighted pan-India network, affordability, accessibility, accurate billing, voice clarity, and no call drops. ‘Break the Language Barrier’ highlighted the effective usage of mobile telephony services to overcome language barriers that exist in the Indian multi-lingual society. Both these advertisements were appealing in nature leading to more stickiness among Idea subscribers and creating a strong brand loyalty. In February 2012, the Supreme Court canceled 122 licenses which included 9 licenses of Idea and 4 licenses of Spice Communications of which 7 licenses (Tamil Nadu, Kolkata, West Bengal, Odisha, Assam, North East, and Jammu & Kashmir) are operational. These 7 circles account for 7.8 mn subscribers and contribute around 5% of Idea’s cumulative capex and 4% of its revenue. The real impact will depend on EGoM’s (empowered group of ministers) spectrum decision which is still awaited.

A CyberMedia Publication | voicendata.com | July 2012 | VOICE&DATA | 107

Tata Communications

‘ Each month we carry 3,200 peta bits of data on our network’

erformance in FY12 Tata Communications maintained its position as the largest carrier of international voice traffic, carrying over 46 bn minutes during FY12. Overall, the consolidated revenues grew 18% y-o-y to `14,431 crore. Revenues from global voice solutions (GVS) grew by 16% and global data solutions (GDS) by 18%, respectively. Revenue Break-up Net revenue (after accounting for out-payments) from NLD services in India was `132 crore during FY12. And the net revenue from international voice services (globally) was `12,182 crore. India Revenue India contributes less than 30% of the company’s total revenue, across global voice services and global data services. Capex Spending In FY12, Tata Communications invested about `1,700 crore on network expansion, completion of submarine cable projects, and new products. In the coming year, we anticipate capex spending of $250-300 mn annually and most of it will be used to upgrade and increase capacities of its existing networks and data centers. ILD Performance We have experienced significant growth last year with 11% increase in traffic y-o-y, aided by considerable growth from mobile operators and next-gen service providers. Although the rate of growth for international voice services has decreased, but our market share continues to improve. Several service providers are choosing to focus on core business capabilities, providing an opportunity for us to create new partnership models. Standing in Global Data Services Tata Communications is one of the leaders in global data services. It carries 25% of the world’s international lit capacity. Over its internet backbone, it transmits 3,200 petabits of data every month. It also has over one mn sq ft of data center and co-location space across 42 locations.

—Srinivasa Addepalli senior vice president, corporate strategy and communications, Tata Communications

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Submarine Cable Ring Network Our company’s wholly owned cable ring is a tier-1 IP network. On top of this robust backbone, is our voice and data businesses and comprehensive portfolio of managed enterprise services. These include high-speed connections and global MPLS virtual private networks—the world’s largest network of telepresence services, most extensive DDoS mitigation and detection service, content delivery networks, and cloud offerings. Emerging Market Strategy There are 3 emerging market regions which are of primary interest to the company—Asia, the Middle East, and Africa. These are the regions of very high demand growth and the company has invested considerably in these geographies, not just in submarine cable connectivity but also in intra-region capabilities.

Top 10

With Flying Colors... Tata Communications had a pleasant fiscal with its enhanced cloud computing offerings, increased mobile penetration, and expansion of its networks

ata Communications, the ‘true MNC originated from India’, as its CEO Vinod Kumar puts, ended the last fiscal with flying colors, not just only in its financial performance but also in its business strategies, exploration into new markets and expansion of its networks. The company classifies its operations into 3 main business segments—global voice solutions, global data and managed services, and Neotel (its subsidiary in South Africa). During 2011-12, the company handled 4,672 crore minutes of international voice traffic globally, a growth of 13.41% over the previous year. Traffic to and from India has grown from about 1,306 crore minutes in 2010-11 to about 1,744 crore minutes in the year. This enabled the company to maintain its gross margins or net revenue per minute (NRPM) in 201112 in spite of declining revenue trends in the industry. Tata Communications maintained its positioned as the largest carrier of international voice traffic, carrying over 46 bn minutes during FY12. Overall, the consolidated revenues grew 19% y-o-y to `14,196 crore. Revenues from global voice solutions (GVS) grew by 16% and global data solutions (GDS) by 18%, respectively. Increased mobile penetration has resulted in significant growth in the NLD traffic for Tata Comm within India. However greater competition through the issue of new NLD licenses, along with other regulatory initiatives, has reduced the gap between NLD and local tariffs. The company’s NLD traffic has decreased from 1,039 crore minutes in 2010-11 to 855 crore minutes in 2011-12.

6 However the contribution of net revenues from the India NLD business declined from `213 crore to `132 crore, due to the steep price erosion in this area. During the same period, net revenues from international voice services (globally) were `12,182 crore. During FY12, Tata Communications invested about `1,700 crore in capital expenditure, on its network expansion,

Revenue

FY 2011-12 (in ` crore) 14,341

17.7%

12,185

2011-12

2010-11 V&D Estimates

completion of submarine cable projects, and new products. In the coming year, the company plans a capex spending of $250-300 mn annually and most of it will be used to upgrade and increase capacities of its existing networks and data centers. Recently, the company also announced the completion of the world’s first roundthe-world fiber optic cable network with the official launch of its Tata Global Network—Eurasia (TGN-EA) cable. The cable connects Europe to India, through Egypt, bringing increased capacity, resilience, and enhanced communications links to not only the Middle East, but to the rest of the world. The company is also capitalizing on the growing trend of outsourcing by telecom operators to manage their international voice services. In a significant partnership in terms of brand value, the company tied-up with Formula One in the last fiscal, as its global technology partner, as an example of how far the Indian company has come in terms of providing complex IT services beyond just networking capabilities. With this, the company hopes this case study can help the company win more potential enterprise customers. Within the Asia Pacific region, Tata Communications has identified Singapore, Hong Kong, and Australia as key developed markets on which to focus. It is also targeting to build its presence in Vietnam, Indonesia, Malaysia, and the Philippines. Starting with this fiscal, the company is all set to redefine its business model betting high on cloud services. In order to target emerging markets around the world, as well as address ongoing convergence of data traffic on Internet Protocol (IP) systems and growing need for managed services, the Tata Group-Indian govt joint venture is putting all its thrust on cloud computing, enterprise video, and mobile broadband offerings. These services would be part of the company’s managed services offerings, which would be key to addressing the needs of companies in the emerging markets.

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Tata Teleservices

‘Our steady growth is attributable to our innovative solutions’

erformance in FY 2011-12 Tata Teleservices has been showing healthy growth as the company consolidates its strengths in the mobility and enterprise business spaces countrywide. The year was an exciting one for us, and marked the unveiling of a single, consolidated brand interface for all our products and services—Tata DOCOMO— on both the CDMA and GSM technology platforms. Our steady growth is attributable to our innovative products and services, as also our transparent tariff options. Another strategy that clicked for us is our strong focus on social media outreach and the use of the digital space for customer acquisition—these have helped us create customer delight and win customer affection. Trai Recommendations on Spectrum The final decision on this matter are in the process of being taken and the implications can only truly be understood after it happens and the government comes out with the final announcements. Mobile Money Development We are working closely with partners to put together attractive and lifestyle-enhancing models for our customers on various value-added service streams. Also, our partnership with NTT DOCOMO, the world leader in telecom technology creation, stands us in good stead as we launch relevant and differentiated products in the Indian market. 3G Performance Tata Teleservices was the first private sector operator to launch 3G services in India, in November 2010, and we are pleased with the response so far—especially as we see healthy growth numbers. Our 3G services are available across all the 9 circles where we won the license to do so. We have covered 51% of Indian towns with a population of over a million, and 60% of towns with over half-a-million people. We expect a sizable proportion of our data customers to adopt 3G in the ongoing fiscal year and our endeavor is to expand our 3G reach manifold. Going forward, one will see TTL offering some path-breaking products and services on the 3G front, products that will simplify and enrich lives.

—N Srinath MD , Tata Teleservices

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Non-voice Contribution Non-voice services accounts for between 11-12% of the average mobile operator’s revenue, TTL has always enjoyed a far greater revenue share in this space. There is an increased transformation of business models in India with an aggressive focus on value-added services—this saw the VAS market, including messaging, mobile internet, social networking, and mobile payments gallop beyond expectations. Our strategy is to continue to launch innovative, useful and affordable value-added services for our customers, more so as we develop a keener understanding of their variegated need for fast-paced communication.

Top 10

Unification Worked The company integrated all its brand under Tata DOCOMO for cost optimization and revenue maximization

ata Teleservices, along with Tata Teleservices (Maharashtra), serves over 80 mn mobiles in more than 450,000 towns and villages across the country with a bouquet of services encompassing GSM, CDMA, and 3G platforms across one unified and integrated brand—Tata DOCOMO. Standalone, the company has more than 70 mn mobile customers. In FY12, the company unveiled one common brand Tata DOCOMO and consolidated all its organizational assets like retail touch-points, digital footprint, and consumer franchisees across technology platforms under a single brand. The company’s growth in the last fiscal can be attributed to innovative products and services and transparent tariff options like: Pay per second billing, pay per character SMS, pay per KB data, and pay per site internet. There is an increased transformation of business models in India with an aggressive focus on value added services including messaging, mobile internet, social networking, and mobile payments gallop beyond expectations. In the fiscal, the company launched innovative, useful, and affordable value added services—be it vehicle tracking services for fleet management and taxi management; asset tracking services for cargo management, consignment tracking, and ATM finder; workforce management solutions for employee safety, sales force automation, and service ticket allocation. Tata Teleservices also partnered with Navteq to provide 3G customers the SMS route finder service in all handsets. In the fiscal, the company joined hands with Handygo Technologies to foster ICT access to visually challenged and rural masses. Tata Indicom launched ‘EK Behtar

7 Zindagi’ for customers in rural areas and focused on providing day-to-day information to Tata Indicom’s rural subscribers regarding health, education, finance, weather information, mandi rates, livestocks, agriculture, and fisheries. In the fiscal, the company introduced photon max, offering high speed data services using Rev B services. Initially, photon max was available in 5 metros but later it was expanded to 57 other cities across the country. The company also announced the

Revenue

FY 2011-12 (in ` crore) 27%

10,512

8,280

2011-12

2010-11 V&D Estimates

launch of a revolutionary internet access device—3G Wi-Fi hub—enabling multiple users and devices to share wireless internet access and stay connected on the go. The device offers uninterrupted connectivity for specific Wi-Fi devices like laptops, tablets, gaming consoles, and Wi-Fi-enabled televisions. The evolved device takes wireless mobile broadband to the next level offering dual-mode internet connectivity to the users—a first in the Indian market. The company also has strategic alliances with Virgin and Future Group. With Virgin, the company has formed a youth-centric brand where focus is on innovative tariff offerings. With Future Group, the company has launched new GSM brand T24 as the company plans to leverage Future Group’s extended retail network. The exciting new brand was unveiled last year and the company first launched GSM operations in the city of Hyderabad. It has since launched T24 GSM services in all 18 circles where TTL has a GSM license. On the infrastructure front, the company has around 80,000 RKm of SDH/ DWDM backbone network with IP-MPLS overlay. Together the backbone and access network covers 8,000 towns and 61,000 villages. In December 2008, TTL announced a unique reverse equity swap strategic agreement between its telecom tower subsidiary, Wireless TT Info-services, and Quippo telecom infrastructure with the combined entity kicking off operations with 18,000 towers, thereby becoming the largest independent entity in this space—with the highest tenancy ratios in the industry. Today, the combined entity—which has been re-christened as VIOM Networks—has a portfolio of nearly 41,000 towers. In total, the company has around 42,000 towers. With respect to 3G subscribers, Tata DOCOMO has around 3.3 mn subscribers. The company has covered 51% of Indian towns with a population of over a million and 60% of towns with over halfa-million people. The coverage is bound to increase and so is the number of subscribers and also innovative applications in the future.

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Aircel

‘In FY’12, our business services revenue grew 70%’

ircel’s Performance 2011 has been an year of building on the strong data positioning for Aircel. The company has launched 3G services in all the 13 circles and was one of the 2 operators which had finally got the right to launch iPhone 4 and iPhone 4S in India. It has also doubled the number of data users and continues to build on a disproportionate share of data market as compared to the overall market share with its pocket internet proposition. The company grew its revenues by 19% and subscriber base by 23% on a y-o-y basis as compared to the industry growth of 15% and 19%, respectively in 2011. Capex Investment In terms of capex, the company has so far invested more than `45,000 crore and remains the highest foreign investment in India so far. In 2011, Aircel invested a further sum of `3,000 crore towards the completion of rollout of 3G networks and augmenting 2G networks. It has also optimized its investment in network in 2011 by pioneering 3G intracircle roaming with Tata. Mobile Money Plans The company is in the process of finalizing its ecosystem and infrastructure and will soon be making an announcement in this regard. 3G Performance Aircel has around 1.2 mn 3G users in 107 towns. The usage and revenues have been slow due to the lower penetration of 3G devices, higher price compared to 2G, patchy 3G networks, and lack of understanding among users on how 3G can positively impact lives. Devices, however, remain the key bottleneck and Aircel, instead of waiting for the penetration to happen on its own, is working to accelerate the penetration of 3G feature phones and low-end smartphones. Business Services Performance Revenue growth for the last fiscal y-o-y was about 70%. Several new data services like Global MPLS and VPNs have been launched which now enable us to provide smart connectivity to enterprises globally. It has also partnered with one of the leading global managed service providers to launch India’s first cloud based WAN acceleration service that boosts application performance and delivery over international networks. Aircel will soon be launching a slew of cloud based products for large enterprises, SMEs, and homes.

—Sandip Das director, Aircel

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Non-voice Contribution Non-voice revenue contribution, which is among one of the highest in the industry, is at 16%. The telecom market has reached an inflection point and is witnessing a shift from traditional voice/messaging based services to value added services over data. Aircel is working to completely revamp its VAS offerings, which are planned to be launched shortly.

Top 10

Banking on the Future

The company is positioning itself as a strong data player, thanks to 3G and BWA licenses

t has been an excellent year as Aircel grew by 23% to net revenues of `6,651 crore. The company is building on a strong data positioning by launching high-speed data network in all the 13 3G circles. Over the last 3 years, the company has invested over `14,000 crore in building data network across the country. It has also initiated many cost reduction initiatives in the last fiscal which helped it in managing costs while revenues continued to grow at a significant rate. In terms of capex for FY12, the company has invested `3,000 crore towards completion of 3G network rollout and augmenting 2G networks. The company has also optimized its network investment by pioneering 2G intra circle roaming with Tata Teleservices helping the company to expand its coverage at a substantially lower capital in many new markets. The company has around 1.2 mn 3G users in 107 towns. Seeing the slow growth of 3G, the company also took the first step to bring 3G services to affordable levels by launching 3G tariff plan at 2G prices with unlimited usage. The company launched 3G Aircel Pocket Internet Smart and this works on 3G and 2G networks seamlessly with no usage restriction on any devices. The 3G Aircel Pocket Internet Smart offers starts from only `8 for unlimited usage for a day. The affordable 3G packages have led to an increase in 3G numbers and this will get reflected in FY13. In the coming months, the company is further strengthening its data proposition by widening VAS offering and rapidly strengthening 3G networks in target markets. The company is also working

8 to accelerate penetration of 3G feature phones and low-end smartphones and plans to launch a series of initiatives in this regard. Non-voice revenue contribution is at 16% and which is among one of the highest in the industry, as claimed by the company. For VAS services to grow exponentially in future the services have to ride on low-end data and nondata devices. Towards this end, Aircel

Revenue

FY 2011-12 (in ` crore) 23.3%

6,651 5,392

2011-12

2010-11 V&D Estimates

is working to completely revamp its VAS offerings which are planned to be launched shortly. During the fiscal, Aircel launched iPhone 4 in India with a range of lucrative tariff plans targeting youth and upwardly mobile and providing them easy internet access. Aircel has a subscriber base of 62.5 mn. The company along with Facebook, internetâ&#x20AC;&#x2122;s leading social utility platform introduced an innovative way to connect with family and friends through the firstever Facebook Voice Updates on Aircel. On the enterprise front, the company focuses on products ranging from premium internet services, e-conferencing, MPLS VPN, NPLC, and others. Aircel offers a suite of world-class internet services and has 400+ PoPs located pan India. The NPLC service is a domestic, point-to-point private leased circuit over national long distance infrastructure. The NLD backbone network covers 36 cities through SDH and DWDM ring connecting 23,000 km. Aircel IPLC services meet international connectivity requirements of a secure and redundant network infrastructure by connecting offices across US, UK, continental Europe, and Asia using fast and reliable leased-line connections. MPLS VPN service offers triple play services for organizations seeking a flexible, scalable and a high performance, private VPN network. Since 2009, Aircel has been focused on non-Aircel long distance business which now generates about 1 bn minutes a month and contributes around `500 crore in FY12. Several new data services like Global MPLS VPNs have been launched by Aircel last year which now enable the company to provide smart connectivity to enterprise globally. The company has also partnered with one of the leading global managed service providers to launch Indiaâ&#x20AC;&#x2122;s first cloud based WAN acceleration service that boosts application performance and delivery over international networks. Aircel is also planning to launch a range of products based on the cloud for large enterprises, SMEs, and homes.

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MTNL

‘Our Mauritius GSM services launched with good response’

erformance in FY12 MTNL has reported a net revenue of `3,595 crore in FY12 but its losses have increased from `3,600 crore in FY11 to around `4,000 crore in FY12. This loss can be attributed to interest burden (`1,000 crore), pension (`1,200 crore), and depreciation and amortization (`1,000 crore). For FY13, the company is looking at additional revenues from towers, real estate, FTTH, and enterprise services. The company is deploying FTTH (fiber-to-the-home) both in Delhi and Mumbai for offering broadband and voice and IPTV services to its subscribers. Presently, the company has around 1,000 FTTH homes which is planned to go up to 10,000 by March 2013. Capex Investment in FY13 This year we are improving on 2G and 3G network to clear coverage issues, thereby increasing 3G speed. We are also planning an investment of `200 crore of which majority will go for mobile network. For FTTH, we are planning to invest `50 crore for both Delhi and Mumbai circles. For 4G, financial viability is a problem. We have shown our intention to return the licenses but the government has to take a decision. Broadband Performance We have around 11 lakh broadband customers in both Delhi and Mumbai. There is a good demand for broadband services in both these circles. We are expecting a good growth in FTTH. We are presently doing FTTH of our own but we are also planning to come out with an expression of interest (EoI) for FTTH in partnership mode as and when it materializes. Passive Infrastructure Sharing We are doing tower sharing and have agreements with airtel and Reliance on a barter basis. We are also renting our space to other service providers. International Operations Nepal Telecom Authority has come out with a unified license regime and UTL, Nepal is planning to apply for it. Once we get the license, UTL will provide GSM services as per unified license. In Mauritius, we have started GSM services and the response is good. We have also offered competitive tariff for Mauritius and India. Presently, we provide EV-DO services and there are plans to provide 3G services by the end of the year.

—AK Garg CMD, MTNL

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Enterprise Division Performance On the enterprise front, we bagged orders from CGHS (Delhi), a Delhi Police Cyber Highway project which connects all police stations in Delhi with the police headquarter. We are also working with state government for surveillance project. We are creating 5 data centers (2 in Mumbai, 1 each in Delhi, Chennai, and Hyderabad) for enterprise and SMB customers.

Top 10

Poor Show! With the worse getting worst, MTNL needs to get up and join the race rather than just sitting and watching the competition

his year too was not good for the state-run MTNL as the company failed to bring any improvement in its balance sheets and has been facing severe pressure on its financials. Despite tremendous support from the government in all aspects, the companyâ&#x20AC;&#x2122;s loss increased from `3,600 crore in FY11 to around `4,000 crore in FY12. This loss can be attributed to many factors like pension wages, interest burden, depreciation and amortization, 3G failure, and many more. The company that is operational only in 2 telecom service areas is overstaffed with close to 45,000 employees compared to 15,000-20,000 for telcos having presence in all 22 circles. Hence taking account of the situation, the PSU is taking steps for its survival in the telecom industry. Some of the measures include reducing its employee strength of 45,000 (as on December 31, 2011) by 15,000 through a voluntary retirement (VRS) scheme. The operator failed to get any edge of having launched 3G services before the private players. Till date, MTNL has about 5.5 lakh 3G subscribers combined in Delhi and Mumbai. The operator tried lower-pricing strategies selling its 3G SIMs for the cost of GSM services. Though it came up with plenty of exciting offers to lure its subscribers with the 3G Jadoo but the 3G magic stick failed to spell its charm and hardly saw tangible results. The telco has announced to raise `500 crore from various banks that will be used to repay debts and meet operational expenses. In July, MTNL had invited expression of interest from banks for providing long-term loans of `1,500 crore with a floating interest rate for a tenure of 7 years.

9 It wanted to raise the funds to repay its debts and meet operational expenses. The loan might be used to repay the loan MTNL had taken for buying 3G and BWA spectrum last year. The company with increasing financial loss and cash crunch has also decided to outsource its BWA services or to return the licenses but the government has to take a decision. The company is already in the process

Revenue

FY 2011-12 (in ` crore) -9%

3,951 3,595

2011-12

2010-11 V&D Estimates

to restructure its `7,000 crore loan taken for buying 3G and BWA spectrum last year. The PSU plans to convert `3,000 crore loan into a long-term debt. The company had already restructured `3,500 crore of debt, by repaying `500 crore and tying up with two state-run banks for the remaining `3,000 crore. Though MTNL has not done remarkably well in its voice business, the company has taken few long strides in pushing its data services. It announced a 15% reduction in data tariff rates cutting down the data download rates from `1 per 1 MB to `1 per 1.2 MB. The state owned telecom major has even revised and rationalized its data plans to suit the needs of its different segments of customers. Amidst shrinking cellular market share and falling fixedline revenues, MTNL had been betting big on its fixedline broadband services and enterprise business. The company has around 11 lakh broadband customers in both Delhi and Mumbai. There is good demand for broadband services in both Delhi and Mumbai and it is also expecting good growth in FTTH. The PSU has also bagged CGHS, Delhi and Delhi Police Cyber Highway project, which connects all police stations in Delhi with police headquarters. It is working with state government for surveillance project and is also creating 5 data centers (2 in Mumbai, 1 each in Delhi, Chennai, and Hyderabad) for enterprise and SMB customers. Internationally the state-run telco is eyeing a 51% stake in Zimbabweâ&#x20AC;&#x2122;s stateowned landline operator, TelOne, for an undisclosed sum. TelOne also has a GSM mobile permit, it gels well with MTNLâ&#x20AC;&#x2122;s long-term plan to enter the African cellular soil. In Mauritius, the company has started GSM services and the response is good. The company has also offered competitive tariff for Mauritius and India. Presently, the company provides EV-DO services and plans are to provide 3G services by the end of the year. Well, all we can say is that the company needs to take some harsh action and build-up strategies to resurrect its typical PSU image.

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TTML

‘Our VAS revenue, is much higher than industry standard’

erformance in FY 2011-12 TTML registered a revenue growth of 8% in FY12, showing a topline of `2,506 crore in the fiscal, compared to `2,316 crore in FY11. EBITDA in FY12 grew by 10% to `547 crore, compared to `497 crore in FY11 after excluding profit on the sale of long-term investments and extraordinary provisions. Brand Integration FY12 was exciting for us, both from the planning and implementation perspectives, as we realigned our business strategy and streamlined processes to prepare to leverage the emerging opportunities in the Indian market. The year also marked the integration of our brands as we consolidated all our service offerings under a single brand—Tata DOCOMO. On revenue front, we did well, witnessing a healthy topline. This underscored the fact that the various facets of the telecom business—customer service, products and services, and network capabilities—are fast emerging as the driving forces that have seen us cement our position in the fast-evolving industry. In the quarter ending December 32, 2011, TTML launched Tata DOCOMO Photon Max in the rest of Maharashtra and Mumbai circles—the product was an industry-first and offers speed of up to 6.2 Mbps. Launched on the CDMA platform, Tata DOCOMO Photon Max provides users with a never-before browsing experience, the benefits of free national roaming and seamless in-building coverage. Reinforcing its claim as a superior network service provider, Tata DOCOMO, the unified telecom brand of Tata Teleservices (Maharashtra) has extended its network strength to over 9,000 towers across Mumbai, Maharashtra, and Goa, ensuring that customers continue to enjoy seamless connectivity.

—N Srinath MD, Tata Teleservices Maharashtra

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Non-voice Contribution Non-voice service accounts for between 11-12% of the average mobile operator’s revenue, TTL has always enjoyed a far greater revenue share in this space. There is an increased transformation of business models in India with an aggressive focus on value added services—this saw the VAS market, including messaging, mobile internet, social networking, and mobile payments gallop beyond expectations. Our strategy is to continue to launch innovative, useful, and affordable value added services for our customers, more so as we develop a keener understanding of their variegated needs for fast-paced communication and instant access to information. We have also ensured that we provide a local flavor and innovative infotainment applications to engage users across the country.

Top 10

Pain without Gain The company’s topline and bottomline got affected as a result of slip in overall revenues and increase in net losses in FY12

t was not a good year for Tata Teleservices Maharashtra as both its topline and bottomline took a beating. On the revenue front, the company clocked better on telecom services but slipped on overall revenue by around 20.5%. Total revenue was `2,488 crore compared to `3,128 crore in FY11. Net loss increased many fold from `50 crore in FY11 to `518 crore. In FY12, the company unveiled one common brand, Tata DOCOMO, and consolidated all its organizational assets like retail touch-points, digital footprint, and consumer franchisees across technology platforms under a single brand. The company’s growth in telecom services in the last fiscal can be attributed to innovative products and services and transparent tariff options like pay per second billing, pay per character SMS, pay per KB data and pay per site internet. There is an increased transformation of business models in India with an aggressive focus on value-added services including messaging, mobile internet, social networking, and mobile payment. In the fiscal, the company launched innovative, useful and affordable valueadded services be it vehicle tracking services for fleet management and taxi management; asset tracking services for cargo management, consignment tracking and ATM finder; workforce management solutions for employee safety, sales force automation, service ticket allocation. The company also partnered with Navteq to provide 3G customers avail SMS route finder service in all handsets. It has also announced the launch of voice guided navigation application ‘Smart Pilot’. In the fiscal, TTML joined hands with Handygo Technologies to foster ICT access to visually challenged and rural masses.

10 Tata Indicom launched ‘EK Behtar Zindagi’ for customers in rural areas and focused on providing day-to-day information to Tata Indicom’s rural subscribers regarding health, education, finance, weather information, mandi rates, livestocks, agriculture, and fisheries. All this has helped the company to garner around 30% from VAS and data. In the quarter ending December 31, 2011, TTML launched Tata DOCOMO Photon Max in the rest of Maharashtra and Mumbai circles—the product was an

Revenue

FY 2011-12 (in ` crore) -20.5%

3,128

2,488

2011-12

2010-11 V&D Estimates

industry-first and offers speed of up to 6.2 Mbps. Launched on the CDMA platform, Tata DOCOMO Photon Max provides users with a never-before browsing experience, the benefits of free national roaming and seamless in-building coverage. The company also announced the launch of a revolutionary internet access device—3G Wi-Fi Hub—enabling multiple users and devices to share wireless internet access and stay connected on the go. The device offers uninterrupted connectivity for specific Wi-Fi devices like laptops, tablets, gaming consoles, and Wi-Fi-enabled televisions. The evolved device takes wireless mobile broadband to the next level, offering dual-mode internet connectivity to users—a first in the Indian market. The device enables users to manouver between Tata DOCOMO’s next-Gen 3G GSM network and Tata Photon Plus on the CDMA platform offering speeds of up to 7.2 Mbps. The company also has strategic alliances with Virgin and Future Group. With Virgin, the company has formed a youth-centric brand where focus is on innovative tariff offerings. With Future Group, the company has launched new GSM brand T24 as the company plans to leverage Future Group’s extended retail network. On infrastructure front, the company has extended its network strength to over 9,000 towers in last few months across Mumbai, Maharashtra, and Goa circles. On the infrastructure side, the company has SDH/DWDM backbone network with IP-MPLS overlay. In terms of expenses, the company has invested `2,502 crore vis-a-vis `2,755 in FY11 of which majority expenses include network operations costs and interconnection and other costs which contribute 40%. Tata Teleservices along with Tata Teleservices (Maharashtra) serves over 80 mn mobiles in more than 450,000 towns and villages across the country, with a bouquet of services encompassing GSM, CDMA and 3G platforms across one unified and integrated brand-Tata DOCOMO. Standalone, the company has more than 10 mn mobile customers.

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Event REPORT

Managing a Perfect Service The Eurozone crisis opens up new frontiers for BT in emerging markets like India in the Asia Pacific region

T, a leader in offering managed services to global clients and corporates, seems to have its hands full for the next fiscal. The British born telecom firm in its recently concluded Asia Pacific Influencer Summit in Hong Kong showcased its prowess in the areas of communications and networking. In the meet, the firm expressed its interest in venturing new markets and foraying into new verticals. Also, it would

enhance its existing product portfolio within verticals like health, trading, and retail. Besides, the ongoing Eurozone crisis has compelled the firm to look eastward for its future growth.

New Frontiers In an event conducted in its Asia Pacific head office in Hong Kong, the company announced its plans to increase its focus on the rapidly growing health IT market in the Asia Pacific region. To support this,

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it is creating an Asia Pacific health practice, which will coordinate all BTâ&#x20AC;&#x2122;s health activities in the region. The health practice will include experts in clinical design assurance, clinical safety management, technical architecture, and major program practice, providing a strong capability for local delivery. More than 130 BT people will be working solely on health in the region by the end of the year. The company expects the numbers to increase as its health business expands.

tical targets and drug candidates. In addition, this platform enables research s c i e nt i st s to create global project groups and collaborate using social media tools. This ecosystem will allow the group to BT India MD Sudhir Narang delivering his speech at the summit securely upload Globally, the health IT market is documents, share results, and communiundergoing a transformation driven by cate via IM, voice, video or chat to analyze ageing population, the increasing burden results in an environment that segments from chronic diseases, and the adoption data and uses qualified hardware comof costlier medical and drug innovations. ponents and workflows specific to the In particular, the health IT market in Asia pharmaceutical industry. Pacific is experiencing a period of rapid The BT for Life Sciences R&D platform growth. BT estimates that its current ad- is supported by the BT Assure portfolio dressable market in healthcare in the of security services. These allow BT to region is GBP 1.3 bn in 2012/13, growing assist customers in designing data encrypto GBP 1.6 bn by 2014/15. tion, anonymization, risk management, “We have made a great start and our and resilience to meet their quality and customer-led investments have already regulatory requirements for the cloud begun to pay dividends with BT winning environment. some key contracts. Today’s announceAt the initial stage of the rollout, the ment reaffirms our commitment to the new cloud platform for life sciences builds region and we will continue to differenti- on BT’s on demand compute service, with ate ourselves through providing innova- an innovative compliance ‘wrap’ meeting tive and bespoke solutions,” said Kevin the GxP2 requirements for qualificaTaylor, president, BT, Asia Pacific. tion. This conforms to the quality and During the event, BT also announced regulatory requirements that make an BT for Life Sciences R&D and its cloud environment suitable for many regulated service program which is designed to en- applications that can be collaboratively able collaboration within the life sciences used where partners may have differing industry for increased R&D productivity. risk profiles. The new service is designed to allow customers to comply with the industry’s strin- Looking Eastward gent security, regulatory, and compliance Amid the economic turmoil in Europe, requirements in a way that is suitable for the British telecom firm has shifted its many regulated applications a company focus towards east and started looking at may wish to deploy. emerging markets like India and China. BT for Life Sciences R&D is being “The economic turmoil in Europe has developed to become a secured and seg- driven BT to step up the pace in exploring regated platform for scientists in pharma- high-growth emerging markets, such as ceutical, biotech, devices, and diagnostics the Asia-Pacific region and Latin America,” companies as well as in academia and gov- said Jeff Kelly, CEO of BT Global Services. ernment. This will allow them to construct Furthermore, Europe is a mature market and orchestrate in silico1 workflows and for BT since it already has ‘such a large data pipelines to identify new pharmaceu- presence’ there, he added.

BT announced an investment plan in September 2010 that will allow it to rapidly expand its Asia-Pacific businesses, followed by similar plans for Latin America in October last year and Turkey, the Middle East, and Africa earlier this year. The aggregate revenue in those 3 emerging markets rose 16% in the fiscal year that ended in March, while the total contract value increased 60%. “I am very encouraged with those investments (in emerging markets) so far,” said Kelly. He says revenue would continue growing at a double-digit rate. The company added 300 new employees in the region earlier this year, including local leadership and additional professional services staff members. The total headcount in the region has surpassed 2,500.

A Bit of Charity Too The company, extending its CSR arm, announced a partnership with HOPE Foundation in India, an NGO aimed at empowering children and other vulnerable individuals, to fund programs which create hope for underprivileged children through digital technology. Through this partnership, BT will be supporting the project for the coming 2 years and help the project in meeting its infrastructure and operational needs. The company would set up a digital learning center in a school to teach students the various facets of information technology through a customized curriculum. Education would be imparted through audio and video methods, and by leveraging internet, children will experience first hand the world of digital learning, BT said. By encouraging children to discover new concepts, applications, and tools, the project aims to enhance learning and help the students to take up digital technology as a career. Both the organizations expect to empower 500 children every year through digital literacy. Not only will this initiative help in building their confidence, but will also help them develop future skills that can increase their future enjoyability. Ritu Singh ritus@cybermedia.co.in The author was hosted at Hong Kong by BT

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Analysis

Nokia: All Set for a Comeback In line with its restructuring, Nokia cuts 10,000 jobs and replaces top executives profitability. Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value.”

Focus

okia is leaving no stone unturned to regain its leadership and profits. It has now put in place a defined strategy, in line with its restructuring process. And is striving hard to improve its operating model and bring back the company on profitable growth. As part of its strategy, it plans to reduce up to 10,000 jobs globally by the end of 2013. Nokia is set for improving its operating model through a 3-pronged strategy—it has identified crucial investment areas, cost-cutting strategies, and restructuring of its leadership team. The company reported a weak second quarter in 2012 which affected devices and services business immensely. “Nokia expects competitive industry dynamics to continue to negatively impact devices and services in the third quarter 2012. Nokia now expects its non-IFRS devices and services operating margin in the second quarter 2012 to be below that of the first quarter 2012 level of -3%,” said a statement.

Cost-Cutting Strategies Nokia will reduce its headcount by 10,000

jobs globally by the end of 2013. It plans to consolidate its manufacturing operations and thus will shut down its manufacturing operations in Ulm (Germany), Burnaby (Canada), and in Salo (Finland). But the research and development efforts in Salo would continue, said the statement. “These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,” added Elop. “We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options, and necessary advice to find new opportunities.” As part of these planned changes, Nokia will closely assess the future of certain non-core assets. In line with this, Nokia announced plans to divest Vertu. “Nokia is significantly increasing its cost reduction target for devices and services in support of the streamlined strategy announced today,” said Timo Ihamuotila, executive vice president and CFO. He added, “With these planned actions, we believe our devices and services business has a clear path to

122 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

The company is betting big on location based services, smartphones, key feature phone technologies, and imaging assets. Nokia plans to acquire assets from Sweden based Scalado and this will strengthen its imaging assets. The company will invest on location based services including navigation and visual search application to differentiate its Lumia smartphone series. It aims to further develop its Series 40 and Series 30 devices, and invest in key feature phone technologies like the Nokia browser. It plans to focus on marketing and sales activities.

Leadership Overhaul Nokia has appointed Juha Putkiranta as executive vice president of operations, Timo Toikkanen as executive vice president of mobile phones, Chris Weber as executive vice president of sales and marketing, Tuula Rytila as senior vice president of marketing and chief marketing officer; and Susan Sheehan as senior vice president of communications. Putkiranta, Toikkanen, and Weber will join the Nokia leadership team effective from July 1, 2012. Jerri DeVard steps down as chief marketing officer, Mary McDowell steps down as executive vice president of mobile phones, and Niklas Savander steps down as executive vice president of markets. DeVard, McDowell and Savander will all continue in advisory roles through the transition of their roles, however, they step down from the Nokia leadership team effective June 30, 2012. Malini N malinin@cybermedia.co.in

PERSPECTIVE

Increase Trust Among Stakeholders In the last 2 years, the trust between industry and government, industry and regulator, government and regulator, and between industry players has decreased significantly. The time has come to rectify this and do a fast recovery so that the industry can bounce back to normalcy. This will help everybody in the long run. Telecom, the sunrise industry of the Indian economy, is going through a bad phase. Trust is at its lowest, thanks to the numerous court cases, but a genuine effort should be made by all stakeholders to come out from this confusion. All this will lead to a positive and cordial environment among all the stakeholders, helping industry to recover fast. Trust is at its lowest also between the government and industry, and regulator and the industry. According to the industry, the government wants to kill it by taxing for each and everything, and if this is not enough, the government wants to heavily penalize the industry for any wrong doing. So, to remove the logjam, the government and the regulator need to take some positive steps which will help the industry move forward. The role of the regulator is not only to do regulation but to see that the industry survives from a crisis and moves forward rather than continuously fall into one crisis after another. I believe a lot will improve if the regulator thinks about how to make the telecom industry more investment friendly and more consumer friendly rather than thinking about how to collect more money for the government. If we look closely, the recent regulationâ&#x20AC;&#x201D;be it 2G spectrum pricing, bringing telecom tower players under the ambit of license fees, bringing VAS players under the ambit of license fees, and othersâ&#x20AC;&#x201D;in all these cases, the perceived intention of the regulator was to earn more revenue for the government. Sometimes, this is okay but not always, as one cannot tax the service providers after a certain extent. There is a difference between past regulation and regulation made in the last 2 years. Earlier, if there was any mistake in regulation, the regulator used to do course correction and move forward but in the last 2 years, the regulators have been committing mistakes after mistakes and the end result is that things are not moving forward. I believe, the new chairperson should think about all these things and focus on regulation to make it more consumer friendly and industry friendly. This will help the industry to move in a forward direction. It seems even the government, ie, Department of Telecommunicationsâ&#x20AC;&#x2122; entire focus is to earn hefty fees from the operators by imposing a minimum penalty of `50 crore. Even the formation of term cell in the government is to collect more revenue for the government. The government should be more proactive and make rules which are transparent so that its interpretation does not differ from person to person or company to company. Even the industry players need to come together and leave their fights for the common cause of making telecom once again the sunrise sector of the Indian economy. This would not be easy for the players as they have been fighting for the voice revenue share in the past but things are going to change once the focus shifts from voice to data where one needs a different mindset. To make India a world power in data infrastructure (3G or 4G), operators need to do a lot of collaboration as singlehandedly they are not in a position to create that mammoth infrastructure. Not only this, they also do not have enough cash to fund these projects. So, the only option is to increase trust between operators, government, and regulators and this will definitely help the industry to move out of the present crisis. Pravin Prashant

pravinp@cybermedia.co.in

124 | VOICE&DATA | July 2012 | voicendata.com | A CyberMedia Publication

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A unified portal: to display the overall running situation of the city, and to serve the government, enterprises and the public An application development platform: to guarantee the application to be open and expandable, and to promote the development of the local software industry A cloud-computing data center: to solve the issue of chimneys for the information collaboration sharing among various institutions A wireless government-affair private network: 4G high bandwidth network with advanced identification technology to secure the government information

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Deploying Beijing TD-LTE Private Network, the first wireless government-affair private network in China, which meet the requirements for mobile law enforcement applications and seamless HD video surveillance services of the whole city As a pilot project of China National Development and Reform Commission with the maximum numbers of electronic license plates of 1.2 million, Chongqing Vehicle Network maintains the transportation security of the city and greatly decrease vehicle theft criminal rate Demonstration project of E-Government Cloud of Hainan Province, realizes the sharing of basic data and infrastructure among all Haikou city government departments

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