Spice says Idea merger talk is speculative

Indian mobile firm Spice Telecom was moving ahead with plans for an initial public offering and media reports it would merge with larger rival Idea Cellular were speculative, a company official said on Wednesday.

As expected Spice would merge with Idea, and was being valued at between 45-50 billion rupees.

Earlier this week, a newspaper had reported that a merger was a possibility, but such a deal could take up to one year.

"These are all speculative news items. Our IPO process has already progressed actively," Umang Das, a director at Spice Telecom, told Reuters.

He declined to comment further.

A spokeswoman for Idea Cellular's parent, Aditya Birla Group, declined comment.

Spice Telecom provides services in two of the 23 circles or zones that make up India's telecoms market, and had 2.8 million subscribers as of end-April.

Idea Cellular, which provides services in 13 circles, had 14.6 million subscribers at the end of April.

Vodafone to complete Bharti stake sale

British giant Vodafone will transfer its 5.6% stake in Bharti Airtel back to a Bharti group company for $1.6 billion by November next year. The shares will be transferred in two tranches.

After agreeing to acquire 67% controlling stake in Hutchison Essar for $10.9 billion, Vodafone had entered into a share sale agreement with Bharti regarding its 5.6% equity in the company.

“On May 9, 2007, the Bharti group company irrevocably agreed to purchase this shareholding and the group expects to receive $1.6 billion in cash consideration for such shareholding by November 2008,” Vodafone said in a statement after announcing its results for the quarter ended March 31, 2007.

The world’s largest cellular company had completed the purchase of Hong-Kong based Hutchison Telecom International Ltd’s (HTIL) stake in Hutchison Essar on May 8. Subsequently, it agreed to sell the stake back to Bharti.

“The shareholding will be transferred in two tranches, the first before March 31, 2008 and the second by November 2008. Following the completion of this sale, the group will continue to hold an indirect stake of 4.39% in Bharti Airtel,” the statement added.

Vodafone accounted for Bharti Airtel as a joint venture until February 11, 2007 (when it announced the acquisition of Hutchison Essar) following which it has been accounted for as an investment. Vodafone and Bharti have also signed a memorandum of understanding on infrastructure sharing. Bharti scrip closed at Rs 835.05 on Tuesday, up 0.52%.

Vodafone earlier paid $10.9 billion to HTIL against the previously agreed price of $11.08 billion to reflect retention and closing adjustments agreed between Vodafone and HTIL.

“The last year has seen a further reshaping of Vodafone’s portfolio, with our acquisitions in Turkey and India further increasing the group’s exposure to the exciting growth opportunities in emerging markets. We are well placed to continue delivering on our strategy,” Vodafone CEO Arun Sarin said.

Earlier, Vodafone’s two nominees on Bharti Airtel board — Gavin Darby and Paul Donovan — had tendered their resigned. While Mr Donovan is CEO eastern Europe, Middle East, Asia Pacific and affiliates, Mr Darby is CEO for America, Africa, China and India. The duo had abstained from Bharti board meeting in January this year while Vodafone was in talks to acquire Hutchison Essar.

Bharti to enhance Virtual Private Network (VPN)

Bharti Airtel today partnered with Hong kong based PCCW Global a move that would help carriers, service providers, subscribers and enterprises to build secure global Internet Protcol (IP) networks to support mission-critical applications.

The technology tie will also enhance Bharti's Virtual Private Network (VPN) connectivity globally.

The Hong Kong based PCCW Global will offer enhanced end to end global solutions through its global networking. PCCW Global had recently announced expanded coverage to West Asian markets including Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE, plus Turkey, where Europe meets Asia.

The agreement mainly focuses on the enterprise space by offering world-class services and end-to-end communication solutions.

Under the agreement today Bharti's Multiprotocol Label Switching (MPLS) Internet Protocol Virtual Private Networks (IPVPNs) will be connected to PCCWs globally.

MPLS VPN is a family of methods for harnessing the power of Multiprotocol Label Switching (MPLS) to create Virtual Private Networks (VPNs). MPLS is well suited to the task as it provides traffic isolation and differentiation without substantial overhead.

It can be used to replace existing physical links. The specification is based on the Martini drafts, which define methods to transport protocols such as ATM, Ethernet, and SONET.

Bharti currently owns 102 MPLS points of presence (PoPs) in India and is the only service provider to cover 23 telecom circles of the nation.

Bharti Airtel, Enterprise Services, President, David Nishball said, ''The agreement will enable both Bharti Airtel and PCCW Global to take network coverage to the customer's doorstep by providing seamless connectivity on their inter-connected MPLS IPVPN network in India and abroad .'' PCCW Global CEO Dan Lovatt said, ''The relationship is a part of our strategy to collaborate with global service providers so that we can work even closer with our customers in their migration to MPLS-based Next Generation Networks.'' PCCW Global, a subsidiary of PCCW Ltd, is the worldwide business unit of PCCW Ltd, one of Asia's leading players in Information and Communications Technologies (ICT).

Telecom growth data of Trai, DoT mismatch

The domestic telecom subscriber is undoubtedly growing but to get a correct figure on the key indices like number of additions per month and total user base is not a clear assessment as the official figures of the government and that of the regulator do not match.

The Department of Telecom (DoT) figures released on Thursday for April said the sector expanded by adding 4.9 million in the number of telecom subscribers in April, thereby taking the total number of telephones in the country to more than 211.7 million as compared to 146.20 million during April 2006, a growth of 44.8% during May 2006-April 2007.

All these made the teledensity to improve further to 18.7%, DoT said. This is the only figure in which both the DoT and Trai figures match. The same day Trai figures stated that telecom sector continues to grow with an addition of 5.15 million wireless subscribers in April, taking the total telephone users to 212.02 million and tele-density to 18.74%.

Even in broadband figures the differences remain. The government figures said growth of broadband connections improved further and at the end of March, about 2.29 million broadband connections were provided and coverage of broadband connectivity by public sector service providers has reached 962 cities.

The telecom regulator said total broadband connections in the country has reached 2.43 million by April-end with an addition 0.13 million connections during the month, compared to 0.09 million added during march, a growth of 5.65%.

DoT officials claim the figures released are accurate as it takes into account each and every addition and subtraction of subscribers till the last count.

DoT said the GSM segment has also shown an increase of 4.13 million during April. While the CDMA segment registered an increase of 1.01 million, the fixed segment has declined by 0.23 million. Trai said in the wireline segment, subscriber base increased by 0.04 million in April to reach 40.82 million.

Bharti mobile user base tops 40 mn

India's top mobile services firm, Bharti Airtel Ltd, said on Wednesday its cellular user base crossed 40 million, making it the 10 th company in the world to achieve the milestone in a single country.

India is the world's fastest-growing mobile market, adding more than six million new users every month lured by call rates as low as US 1 cent a minute. The country had 166.05 million wireless subscribers at the end of March.

Analysts and industry experts expect the mobile user base to triple in the next five years as only 15 per cent of India's 1.1 billion population own a mobile phone, compared with 36 per cent in China.

Bharti, managed by billionaire Sunil Mittal, had 38.9 million mobile subscribers at the end of April, according to data provided by Cellular Operators' Association of India, an industry body representing GSM carriers.

One of the earliest entrants to the sector after it was opened for private players Bharti took 11 years to reach 20 million subscribers in 2006 but just another 13 months to double the figure, the company said.

Bharti, which provides mobile services in all the 23 zones or circles that make up India's telecom market, said its share of the wireless user base increased to 23.2 per cent from 20.4 per cent it had stated at end-March.

Bharti, in which Southeast Asia's top phone firm SingTel owns a 30.8 per cent stake, competes with 11 other players in India's fragmented mobile market.

Reliance Communications is India's second-largest mobile services firm, followed by unlisted state-owned Bharat Sanchar Nigam Ltd.

Britain's Vodafone Plc earlier this year bought a controlling stake in India's No 4 mobile firm Hutchison Essar.

Ahead of the announcement, shares in Bharti, valued at $40.3 billion; closed 1.2 per cent down at Rs 849.20 in a Mumbai market that slid 0.63 per cent.

Reliance slashes roaming rates by 70 per cent

Reliance Communications (RCOM)on Tuesday announced 70 per cent reduction of roaming rates for its mobile subscribers.

The new rates, the lowest in the industry so far, are likely to ignite a major tariff fight among mobile phone operators in India.

Anil Ambani's RCOM had abolished rental charges on roaming and also reduced its roaming rates by 44 per cent in February following a directive from the Telecom Regulatory Authority of India (TRAI)

"Now, we have taken a step further by reducing roaming rates to as low as 40 paise per minute on selected plans. This should add real value to those customers, who have a need for travelling across the nation," said SP Shukla, President (personal business), RCOM.

Reducing roaming tariffs has become one of the top priorities for the mobile firms, especially after the announcement by former communications and IT minister Dayanidhi Maran that he would have abolished roaming charges on June 3.

His successor Andimuthu Raja last week said he would look into the matter.

Vodafone launches low cost handsets

Vodafone, which is entering India through the acquisition of GSM operator Hutch, has launched two low-cost handsets for the emerging markets, including India. The handsets are being priced in the $25-$45 range (Rs 1,015-Rs 1,827) depending on the model and the local market conditions.

The new handsets, Vodafone 125 and Vodafone 225, are part of the company’s ongoing commitment to expand access to mobile in emerging markets, where mobile technology and networks are often the only viable and cost effective telecoms service. The handsets are, therefore, key to offering a range of services, particularly in rural areas where mobile penetration is often at its lowest, Vodafone said in a release here today.

China's ZTE Corporation is manufacturing the handsets, under an agreement signed between the two companies in December 2006.

The Vodafone 125 is a black & white model, while the Vodafone 225 is a colour model.

The move by the UK giant comes after the major Indian CDMA operator - Reliance Communications - launched low-cost black & white handsets priced at Rs 777 and colour handsets at Rs 1,234. Tata Teleservices, the other CDMA operator, reduced prices of its existing handsets by Rs 80, making it the lowest priced mobile phone at Rs 770 in the country.

The Finnish handset-maker Nokia followed suit by launching a series of low-priced handsets.

Vodafone Egypt, Vodafone Romania and Vodacom (South Africa) will be the first countries to launch the two handsets in the next few weeks.

TELES launches DNCL Solution in India

TELES, the Germany based fixed and mobile telecom operator solutions provider, today announced the launch of its TELES DNCL solution for “Do Not Call List” (DNCL) in line with recent Telecom Regulatory Authority of India (TRAI) recommendations. The centralized server-based solution integrates into the operator’s existing infrastructure footprint, automatically blocking calls to DNCL registry members. The DNCL solution is the perfect aid to service providers provisioning the corporate and financial services sectors particularly banks, bank DSAs, telemarketing enterprises, insurance providers and domestic call centres.

The TELES solution is fully in line with the TRAI recommendations and India’ s stated intention to set up a fully-fledged National Do Not Call (NDNC) registry. TRAI DNC register guidelines specify that subscribers are obliged only to inform their service provider to enrol in the registry. It is then incumbent upon the operator to register subscriber numbers in a central DNC registry.

It is foreseen that businesses will submit their proposed calling lists to the NDNC registry, where the lists will be “washed” by removing those subscribers listed in the registry. According to the TRAI recommendations, companies who continue to call subscribers who have opted out could face fines of up to US$20 for each call made or have their service disconnected for repeat offending. The TRAI NDNC registry recommendations come as the Indian telephone subscriber based reached the 200 million mark in March, providing telemarketers with unprecedented cold calling sales opportunities.

Announcing the launch of the new TELES DNCL solution, TELES Managing Director Mr. Devasia Kurian said “Our solution integrates into the service providers’ existing telecom infrastructure at the integrated access device (IAD) level, supporting storage of up to one million DNCL numbers. These numbers can then be upgraded subject to requirement. Our DNCL solution allows service providers to meet the needs of corporations and enterprises with DEL, PRI and BRI connectivity. Moreover, the system offers uninterrupted call centre operations connectivity.”

The TELES DNCL solution also supports remote monitoring, online error rectification, traffic analysis and CDR extension details availability.

3G spectrum release will cost defence Rs 4000cr

Mobile operators awaiting spectrum availability from the defence ministry to start 3G mobile services may be disappointed to know that armed forces are far from vacating any radio waves in the near future, as releasing it will cost about Rs 4,000 crore.

3G services are high-end mobile value added services like real-time transactions, video streaming, voice and data services, hold potential for revenue generation for telcos.

"BSNL itself has admitted that laying of exclusive fibre will take about two years to complete at an additional cost of Rs 1,300 crore. This will take the total cost of the army project alone to Rs 3,078 crore. With this increase, the total cost of the project for the three services will be around Rs 4,000 crore approximately," a defence ministry letter to the Department of Telecom (DoT) said.

The DoT had earlier approved Rs 980 crore, the initial estimated cost of the network worked out by the Project Definition Team comprising members from DoT and defence ministry. Thereafter, there is no indication regarding additional allocation of fund to meet the increased cost of the network, it said.

The ministry also said for the interest of the defence security, the armed forces must get reliable alternative networks and full connectivity before the existing spectrum space in vacated.

The defence ministry has also said there has been no meeting of the Steering Committee held on the issue of army and navy components since December 8, 2006, to ensure smooth roll out of the network. It had asked DoT to convene combined meetings for the three services six months ago.

Mobile pre-paid plans to cost less

Aiming to make mobile services more affordable, three leading players have drastically reduced the entry fee for the lifetime pre-paid schemes.

While leading private mobile operator Bharti Airtel was the first to announce halving of fees to Rs 495, from Rs 999 earlier, Reliance Communications and Hutchison Essar followed soon and each reduced charges to Rs 499.

"The current lifetime product at the reduced fee is intended to drive affordability and consumption in the prepaid category further," Sanjay Kapoor, president, mobile services, Bharti Airtel, said.

While Airtel's lifetime product gives Rs 10 free talk-time to subscribers, on Hutch and RCom, subscribers get free-talk time worth Rs 20.

To keep the Airtel and Hutch connections alive, customers have to go for a re-charge of at least Rs 200 every six months. For RCom customers, the corresponding charge is Rs 125 every three months.

Mobile operators should provide directory service: DoT

Mobile operators may have to finally publish telephone directory and start directory enquiry service, something they have managed to put off for 12 years. The department of telecommunications (DoT) has yet again asked the Telecom Regulatory Authority of India (Trai) to furnish its recommendations on the issue.

When this happens, India would join the league of most developed nations and European Union where it is mandatory for mobile operators to publish a comprehensive directory for end-users.

However, Trai has written back to the DoT seeking clarifications on the issue as in 2005 the former had sent a comprehensive set of recommendations to the latter suggesting that telephone directory and directory enquiry service should be made mandatory.

Trai officials said that they have no idea about the status of their earlier recommendations and they should know its fate before they submit a fresh set of recommendations.

The cellular industry, under the aegis of the Cellular Operators Association of India (COAI), had opposed and continues to oppose publication of any directory of post-paid subscribers arguing that mobile phone users prefer privacy. Further, many users give mobile phones to their young children and would not prefer their numbers to be printed in a directory. The issue of roaming charges and unsolicited calls by telemarketing executives were also cited as reasons against publishing mobile phone directory.

However, consumer organisations have insisted on the need to publish such directories as they help in locating people and their addresses.

As far as the licensing conditions are concerned, there’s no uniformity. For instance, the old cellular licenses and basic service licenses mandated operators to publish directories. However, at that time, incoming calls on mobile phones were also charged so the operators never came out with the directories reasoning that it would add to the cost of owning a mobile. The unified access service licence (UASL), which came later, has not made directories mandatory. Instead it enjoins

DoT to do so after consulting the Trai.

In its recommendations, Trai had said that all licence agreements for access service should have uniform provisions for publication of telephone directory and directory enquiry service.

It had also suggested that those subscribers who do not wish to have their names included in the directory can give in writing. Further, with Trai coming out with a regulation on Do Not Call registry to check calls from telemarketing companies, that issue is also taken care of.

It had suggested that while the printed directory should have the names of only post-paid users, operators should provide a web directory of pre-paid users as well.

Idea, Nokia Siemens Networks ink expansion contract

Idea Cellular Limited, a leading Indian GSM mobile services provider and an Aditya Birla Group company, and Nokia Siemens Networks today announced signing of a USD 500 million GSM network expansion contract. Under the contract, Nokia Siemens Network will expand Idea Cellular’s GSM/GPRS/EDGE networks to cover population centres across six circles of Delhi, Haryana, UP East, UP West, Andhra Pradesh and Kerala.

The two year contract includes supply and services of GSM equipment, Intelligent Network, Value Added Services and Circuit and Packet core equipment. Nokia Siemens Networks will deploy the latest state of art equipment like flexi BTS, mini-ultra base stations, Release 4 architecture, media gateways and MSS servers.

Said Mr. Sanjeev Aga, Managing Director, Idea Cellular, “IDEA has been at the forefront of providing innovative voice and data services to its customers by leveraging the best technologies. This expansion is a part of our larger growth strategy to take our services to more consumers by penetrating deeper in the circles we operate. This will allow us to more than double our existing capacity and reach out to thousands of new population centres in these circles.” He added, “Nokia Siemens Networks with its cutting edge technology, and its long standing relationship with Idea, is a key partner in our program of taking our business to a higher trajectory.”

“This win is special since it is our first contract with Idea Cellular as the new entity, Nokia Siemens Networks. It is also a testimony to our continued partnership with Idea,” said Mr. Ashish Chowdhary, Head of India Sub-region, Nokia Siemens Networks. “Our innovative product portfolio and services capabilities will redefine the entire approach of providing networks that are affordable and quality-rich. This contract would support Idea to offer its subscribers an outstanding network experience even as services are expanded to newer population centres.

Nokia Siemens Networks brings together two major wireless and fixed technology players, Nokia’s Networks Business Group, and the carrier related businesses of Siemens Communications. It is ready to serve customers with a best-in-class portfolio that is underpinned by a strong presence in the growing services market, a powerful global R&D team, and a huge global installed base.

Trai weighs roaming options

The Telecom Regulatory Authority of India (Trai) is learnt to be weighing the option of abolishing the national roaming charges.

The move has been triggered by the recent announcement made by Dayanidhi Maran and the keenness expressed by A Raja to look into the matter, sources said.

Trai officials were not available for comment.

Maran, after his exit as communications minister, had told the media that he was planning the abolition of national roaming charges as a gift to Tamil Nadu chief minister M Karunanidhi on his birthday on June 3.

A Raja, who took over as the new communications minister on Tuesday, said he would consider that proposal. Director general of Cellular Operators Association of India (COAI) TV Ramachandran told that the annual revenue-share fees of mobile operators must be slashed to 6% (from the current range of 8% to 12%), if the government wants to abolish the roaming charges.

“Reduction of revenue-share fee is a long pending demand of the industry,” he said. And that’s the only way of compensating the industry for revenue loss from abolition of roaming charges.

In February, Trai had reduced the roaming charges. As per that tariff order, the maximum permissible charge for roaming calls, irrespective of terminating networks and tariff plans, was set at Rs 1.40 per minute for outgoing local calls, Rs 2.40 for outgoing national long distance calls and Rs 1.75 for incoming calls.

Recently, the monthly rental being charged by operators, for access to national roaming service, was also removed. Earlier, there was a monthly levy of Rs 50 for national roaming.

Roaming charges are paid by mobile phone subscribers when they travel out of town, on making local calls, making outstation calls, and receiving calls. Roaming tariff has two components-airtime charges and interconnect charges.

Last year, Maran had announced an equally revolutionary `One India’ tariff plan, which allowed a mobile subscriber to make calls to any destination in the country at Re 1 per minute.

There are only two ways of reducing or abolishing the roaming tariff, industry sources have said. That is, it can be implemented by making state telecom companies—BSNL and MTNL-to slash the roaming charge, which would then be followed by the private players due to competition.

Otherwise, Trai would need to issue a tariff order for the entire telecom sector. The regulator usually issues such orders through a lengthy consultation process with the industry. However, Trai has the power to issue the order on its own.

According to industry estimates, 10 to 15% of mobile subscribers use the roaming facility. But, revenue-loss figures could not be ascertained, if the roaming charges were to be abolished.

VSNL's Major Plans to Enhance Wi-Fi Service

Tata Group Company, VSNL has drawn up major plans to enhance the footprint of its Wi-Fi service in India as part of its strategy to tap into the huge growing on-the-move market.

VSNL has been leading the growth of Wi-Fi hotspot industry in India and today has the largest public hotspot network in India with over 250 hotspots. It has drawn up major plans this year to further enhance the footprint to over 1000 hotspots – bringing the internet that much more closer to the large Indian traveling and on-the-move population.

VSNL’s hotspots include the major domestic and International airports, leading premium Star hotels, educational institutions, sports stadia, hospitals, chain of restaurants and coffee shops. Its partners include companies like Taj Group of Hotels, Le Meridien, Café Coffee Day, Barista, Manipal University, Wockhardt, amongst others. VSNL has also been driving innovation through creating hotspots at non-traditional locations like Mobile Stores, IT stores, Railway Stations, etc.

VSNL is the only Indian company to become a member of the prestigious Wireless Broadband Alliance (WBA), a leading global consortium of Network Wi-Fi service providers. VSNL has drawn up major plans to enable international roaming for business travelers by leveraging the alliance.

In view of its contribution to the Wireless Broadband Alliance, since becoming a member in June 2006 and also looking at the increasing importance of India as a business destination, WBA has invited VSNL to join the WBA ExCo board (Executive committee board) which currently has worldwide telecommunication leaders, British Telecom, France Telecom, Korean Telecom, StarHub, Swisscom Mobile and T-Mobile-US.

VSNL is also gearing up for yet another achievement. “VSNL is deeply honoured to be invited to join the WBA ExCo board and believe that India would play a significant role in shaping the Global Wireless Broadband market” said Prateek Pashine, Vice President - Marketing & Technology, Retail Broadband Business, VSNL.

"India has become a key destination for business travelers across the world thanks to its booming IT industry and large consumer market and WBA has always been very keen to expand its footprint in India. Partnering with VSNL, India’s leading ISP, will enable the WBA members to use VSNL's large network to help their customers across the world to stay in touch continuously. VSNL's membership of the alliance will strengthen it and help link the world to India through wireless Broadband," said Julie Ragbourne, BT, co-chair, WBA, whilst attending the 11th WBA Round Table hosted by VSNL in Goa. 60 delegates from 20 leading service providers across the globe are participating in the Round table.

"We are delighted to welcome VSNL, the pioneers of internet in India, on Board of WBA, which underlines the importance of India as an emerging market for Wi-Fi services” said Ron Angerame, T Mobile US, co-chair, while presenting the invitation to VSNL to join the WBA ExCo Board.

Spectrum crunch hits telecom sector

The unavailability of spectrum has hit the telecom industry so acutely that the Department of Telecom is now considering to limit the number of operators in each service area to maintain a minimum quality of service.

"The Government is contemplating to review its policy and put a limit on the number of access service providers in each service area," a DoT letter top TRAI said.

DoT said in the letter that the step was necessary as "spectrum is a scarce resource and to ensure that the adequate quantity of spectrum is available to the licensees to enable them to expand their services and maintain the minimum quality of service."

There are 23 telecom circles in the country.

Currently, there is no cap on the number of service providers in a service area.

As on date, 159 licenses have been issued for providing access services in the country and generally there are 5-8 providers in each service area. Since any Indian company can apply for unified access license, this is increasing the demand for spectrum in a substantial manner.

In an evolving sector like telecom to ensure that the policies keep pace with the changes, DoT is seeking TRAI's recommendations on the issue of limiting the number of Access Providers in each service area.

The Department is considering to review the whole set of crucial guidelines in the terms and conditions of access providers (cellular/unified access/basic) licenses.

The terms and conditions slated to be reviewed are "substantial equity holding by a company/legal person in more than one license company in the same service areas, transfer of license and merger and acquisition guidelines."

Besides, other guidelines like permitting service providers to offer access services using combination of technologies (CDMA/GSM and or any other) under the same license, roll-out obligations and requirement to publish printed telephone directory will also be reviewed.

TRAI's decision could also decide the fate of Reliance Communications which is aspiring to enter the GSM space in a pan India presence and has thus applied for spectrum.

As per DoT norms, no single company can have more than 10 per cent stake in two different cellular operators in the same circle.

The guidelines also deal with market dominance and stipulate that the total market share of the combined entity cannot exceed 67 per cent in any circle.

Ultra low-cost sets ring in bonanza for Qualcomm

CDMA technology pioneer Qualcomm is all smiles. The launch of ultra low-cost handsets by Reliance Communications (RCOM) augurs well for Qualcomm, which gets royalty on every CDMA handset sold anywhere in the world. It also has the potential to expand the share of CDMA in the world’s fastest growing telecom market.

As per industry estimates, Qualcomm gets around 5% of the price of every CDMA handset sold. However, Qualcomm CEO Paul Jacobs has said its ‘royalty rates are somewhere below the 5% range, so if you have a $40 phone that may be $2 at most.’

With RCOM claiming to have sold a million handsets of the Classic range, beginning at Rs 777, within a week, Qualcomm would have made a cool Rs 3.80 crore at the upper-end rate of 5%. Early this month, RCOM had unveiled a range of low-cost mobiles in the range of $17-$20.

Currently, nearly 73% of the subscribers in India are on the GSM platform while the rest use CDMA technology. The GSM net adds in India are helped by the second hand market, where handsets are available in the $18-$27 range without any subsidies.

According to a research by the Prudential Equity group, “the competitive offering by the CDMA operators is likely to pull new subscribers into their service.” Prudential says the move is positive for Qualcomm in two ways.

“The new CDMA subscribers will lead to higher CDMA handset sales, albeit at a lower average selling price; and two, the availability of low-cost CDMA handset will alleviate some concern over the lack of competitiveness of CDMA over GSM due to low-cost handset availability.”

The major argument by the GSM handset and infrastructure vendors had been the availability of low-cost GSM mobiles compared to higher selling prices for CDMA handsets. “We believe that this will help further narrow the handset cost gap and weaken some of the previous incentives for operators to move to GSM from CDMA to take advantage of lower-cost handsets,” said the report.

Qualcomm was in the thick of controversy last year when RCOM raised questions about the royalty being charged by the US-based chipmaker. Mr Jacobs has said, “If we cut our royalties in half and it’s $1 and you contrast that with the fact that over the last year we dropped the handset prices by 25%, so those royalties that are coming into Qualcomm we’re actually using that to fund R&D and to create competition among handset manufactures, which then brings the handset prices down.”

Blackberry to be available on Reliance network

High-end mobile device Blackberry, which was till now available only with the GSM operators, will be soon launched on CDMA platform by Reliance Communications.

At present, only Bharti Airtel and Hutch-Essar offer the wireless e-mail solution.

Asked when the company would launch Blackberry on its network, Reliance Communications President (Wireless) S P Shukla said, "very soon."

He, however, refused to divulge any further details.

The company today unveiled new range of Reliance Classic colour mobile phones priced in the range of Rs 1,222-1,299.

RCom recently unveiled Classic monochrome handset at a competitive price of Rs 777 and claims to have sold one million handsets in just one week of the launch.

"I have no reason to doubt why our new range of colour phones will not match the success of Rs 777 scheme," Shukla said without giving any exact number which the company is targeting.

He said the company is focusing on new as well as existing customers, who would like to switch to colour phones.

Classic handsets come with SIM cards, which allow subscribers to changeover from one model to another. The subscribers, however, do not have the choice of shifting to another CDMA operator.

TRAI recommends lower FDI in internet services

The telecom regulator has recommended to the government to lower foreign direct investment in Internet Services from the current 100 per cent to 74 per cent and said an entry fee of Rs 20 lakh has to be put in place for ISP providers.

TRAI said the ISPs having 100 per cent FDI equity should be given two years for reducing foreign holding to 74 per cent.

In its recommendations to Department of Telecom (DoT), the Regulator suggested levying an entry fee of up to Rs 20 lakh along with a uniform licence fee of six per cent of gross revenue.

TRAI has recommended replacing the free entry fee by Rs 20 lakh for national level ISPs and Rs 10 lakh for state level ISPs licenses.

A uniform licence fee of six per cent of AGR has been recommended along with minimum annual licence fee of Rs 50,000, Rs 10,000 and Rs 5,000 for national level, state level and district level service providers. This could increase the cost of internet and broadband services if the Regulator's suggestions are accepted.

"Out of 700 licences issued within three years of opening of ISP sector to private service providers, only 389 licensees exist on Thursday. As per the performance monitoring report with TRAI, only 135 Internet service licensees are functionally active," TRAI said.

Internet services in India should be at par with global standards and the interest of consumers in terms of affordability and reliability should be uppermost in the revised plans of ISPs, it added.

TRAI has asked for a financial bank guarantee amount and sought a maximum FDI cap/equity of 74 per cent at par with other services of telecom sector. ISPs having 100 per cent FDI cap/equity have been given two years time for reduction to 74 per cent.

The Authority has also addressed the issue of unlicensed foreign entities providing Internet telephony at cheaper costs to lure Indian subscriber.

"TRAI is concerned with the activities of such companies, as they do not fall within the framework of discipline of telecom sector in India. Apart from security considerations there is also an apprehension that Indian subscriber is misled by such service providers." TRAI hopes that the recommendations if accepted by the DoT will contribute to Internet penetration, curb grey market, effectively provide level playing field and above all serve the consumers interest.

Hutch completes call with Vodafone

Hutch said that it completed the transaction with Vodafone on Tuesday. According to the pact, Vodafone has managed a retention fee of USD 352 million for 10 years, reports CNBC-TV18.

This will waive certain potential claims if they arise within the next 10 years. Hutch's gains before tax is likely to be nearly USD 9 billion.

Vodafone will pay USD 10.83 billion post fresh agreement with Hutch.

Hutch has made it official: its transaction with Vodafone was completed on the 8th of May. Vodafone will pay Hutch around USD 10 billion, instead of the earlier agreed upon USD 11.1 billion.

It is now just a matter of time before Hutch Essar officially becomes Vodafone Essar. The British telecom giant has finally completed its acquisition on Tuesday after getting all regulatory approvals.

Interestingly, Vodafone has reached a fresh agreement with Hutch and will pay USD 10.83 billlion in cash as against the USD 11.1 billion decided upon earlier. The adjustment is on account of Vodafone claiming USD 352 million as retention fee for 10 years. The retention fee is to waive off certain potential claims if they arise within the next 10 years.

Hutch, meanwhile will pocket USD 9 billion as pre-tax gains after making adjustments for retention fee that goes to Vodafone and the settlement fee that will now be paid to Essar.

After the deal is done, the top management can focus on integration issues. The pact with NTT Docomo, for internet telephony, has already been discontinued and the company is likely to rework a lot of the VAS offerings. The Vodafone brand will kick in, in a phased manner over a period of time. There will be clarity on what Vodafone will offer to spice up the telecom market later this month when Arun Sarin, CEO of Vodafone, visits India.

Nokia to up Chennai capacity; ships over 25 mn phones

Having shipped more than 25 million phones in one year, Finish mobile phone giant Nokia is planning to ramp up its production capacity at its Chennai factory and is looking at increasing its market share.

"Our current market share in India is very very healthy and it is improving," Soren Pterson, Senior Vice President, Entry Business Unit Mobile Phone, Nokia, told PTI.

Asked whether Nokia plans to invest further to ramp up its capacity, Peterson said "from the Chennai factory we shipped more than 25 million phones. We are very happy with the performance. It is running just as per our plans."

"I expect that we shall increase the capacity. But how much and when and what what will be the investment, we are looking at all these issues," he added.

Currently, from the Chennai factory, which was set up more than a year ago with invest plan up to 150 million dollar over four years, Nokia is shipping 80 per cent of the phones in the domestic market while the rest 20 per cent is being exported to neighbouring countries.

Asked whether Nokia was exporting phones to Pakistan from India, Peterson said "no. We are not sending Indian manufactured phones to Pakistan.

We always keep in mind the trade regulations of countries and take decision accordingly."

Last week there was a news that Pakistan would not accept Nokia phones manufactured in India.

7 New Nokia Phones after June

Nokia had announced 7 new entry-level phones for the Indian market.

The new phones include: the Nokia 1200 and 1208, the Nokia 1650 and 2660, the Nokia 2505, and the Nokia 2630 and 2760.

Speaking at the launch, Soren Petersen, Senior Vice President for Mobile Phones, Nokia, said, India is very important to Nokia, and to the global mobile communications industry as a whole.

Petersen said, one of the fastest growing markets in the world, India is also home to several Nokia facilities, including R&D and manufacturing.

The Nokia 1200 and 1208 sport new phone-sharing and call-tracking technology, and are aimed at first-time mobile phone users.



Both comtemporary phones, the Nokia 1650 and 2660 are an attempt at marrying functionality and attractive design.



The Nokia 2505 is one of Nokia's sleekest looking fold-style phones for the CDMA market. A unique smooth-back design makes the phone ergonomic enough to both hold and ferry around in a purse or pocket.

At a mere 9.9mm, the Nokia 2630 could qualify as the thinnest handset in Nokia's armory. Both the 2630 and the 2760 are designed for the fashion-conscious, while retaining Nokia's easy-to-use feature set.

All 7 phones will be available in the second half of this year, most likely after June. They will be priced between EUR 35 and EUR 90, which translates anywhere between Rs 1,925 and Rs 4,950.

Trai for three-tier grievance redressal structure

In a move to address the growing customer complaints on service quality against telelcom operaters, the Telecom Regulatory Authority of India (Trai), has directed operators to set up a three-tier grievance redressal structure which will include call centres, nodal officers in each area and a appallette authority in each circle.

Complaints pertaining to fault repair, service disruption and disconnection of service will have to be attended by the operators within a maximum period of three days and other complaints in seven days. If unsatisfied, consumers could approach nodal officers. However, if their greivances are still not redressed, they can go in appeal to the appellate authority, which will have to adjudicate within a maximum period of three months. Nodal officers for complaints like fault repair, service dsiruption will have to resolve the complain within three days while for other complaints, the period is ten days.

But the move has not got the support of consumer advocacy groups who are peeved that the redressal would be undertaken by operators who are the defaulters.

Telecom complaints account for a majority of complaints received by consumer advocacy groups (CAGs) like National Consumer Helpline, VOICE.

S K Virmani, manager, National Consumer Helpline said, "More than 20% of complaints we receive are against various telecom service providers. The issue that has now come up is that the operators themselves have been given the power to address consumer grievances."

Responding to customer complaints that the billings sent to them by operators are difficult to understand, Trai has directed operators that information on applicable tariff plan, credit limit, security deposit, method of calculating the pulse rate will have to be printed with the bill.

For the first time pre-paid customers, Trai has directed, should be provided itemised bills of calls they have made at a reasonable cost when requested.

M C Chaube, advisor, Trai said:"There is growth and competition in the telecom sector and it has thrown up new challenges for protection of consumer interest. We have asked all the telecom operators in our country, who provide basic telephone service, unified access services, cellular mobile telephone service and broadband service, to establish a formal structure to address consumer grievances. The mechanism would be in place within three months."

Legal recourse could be taken against operators who do not comply with the regulation, Chaube said.

Nokia unveils 7 'entry' phones

To tap the 800 million potential users across the world, world's largest handset maker Nokia toady unveiled seven entry-level mobile handsets. The phones aimed at first time users will be priced in the range of Rs 2240-4800, excluding taxes and subsidies.

The company said it is expecting its sales to cross four billion mark by 2010 with half of it coming from the Asia Pacific region, including India.

"We shipped one million mobile handsets globally last year and we expect this number to touch four billion by 2010," Nokia senior vice president, entry business unit, mobile phones, Soren Petersen told reporters.

Half of this growth would come from emerging markets, including India and China, and to grab this opportunity, the company is focusing on reducing the cost of handsets, he said.

The phones would hit the market in second and third quarter of 2007. "India is among the top three markets for Nokia and the company's brand is also among the top 10 most recalled brand in the country," Petersen added.

The Finnish phone maker enjoys a strong position in the emerging markets, but in developed markets Motorola and Samsung have attacked it with popular thin phones.

Reliance launches handset @ Rs 777

Embarking on the low-cost handset epoch, Indian telephony major Reliance Communications announced the launch of its cheapest ever handset at just Rs. 777 a set, with no fine-print and on hidden costs.

However, this is not the launch of the Classic range, but re-pricing of the existing sets already selling.

Aiming at the rural market and also picking up the low-end subscribers in urban areas, S.P. Shukla, president, Personal Business, Reliance Communications said through a countrywide videoconference that this would truly revolutionise the Indian wireless telephony sector.

"Never before and never again," Shukla said would such an unbelievably priced handset be made available. "This is for the moment the lowest price anyone can afford, even Reliance," Shukla said answering a query in Delhi.

The videoconference had wired in scribes from Kolkata, Bhubaneshwar, Lucknow, Bhopal and Delhi, while the Mumbai press was told this earlier in a press conference this afternoon.

Expectedly, Shukla would not budge on issues of investment levels, but said that there would be three in a range of Classic brand handset, the lowest of which would be priced at Rs. 777, and the highest at Rs. 888.

Shukla said that subscribers are free to choose the tariff plan they wanted and accordingly, the initial price offer would fetch benefits as a catch-fast measure by reliance. The benefits could be in terms of free minutes or length of validity, he added.

"Reliance has been the first with its new business initiatives in most things related to mobile telephony, whether it be the One India plan, Capital City offer, lowest tariff rates and so forth, and competitors have copied our innovations, Shukla said.

"So the obvious question was: where could we score higher, and taking cues from journalist friends, who know the market pulse best, we felt that we ought to give a handset at a price which makes people decide on the spot to go for it," he explained.

The additional cost a subscriber would need to make was the SIM card, which could be as low as just Rs. 99, with a talk time of Rs. 100, Sajiv Kanwar, CEO, Delhi and Haryana explained to scribes in Delhi.

Asked what the intriguing "never before and never after" price meant, and whether Reliance, as usual, would soon raise the price, Shukla said: "I do not make predictions, all I can say is that if you are planning to buy my set, buy it fast."

Classic is a brand name, he told and company sources said that of the 16 in the Classic range, some were manufactured in China, some in Taiwan and others elsewhere.

Reliance officials fought the 'reliability factor' of Chinese goods, saying that even the best brand name in the world is manufactured in China. "The reliability of these sets come with the reliability of Reliance as a brand, I can assure you," Kanwar told media persons here.

Asked why Reliance does not get into the manufacturing of handsets, Kanwar said that it did not make business sense, because then the company would have to manufacture for the entire available space in the Indian market to get the economies of scale to bring down prices further than this.

Shukla said that these phones have all the features that there are in any mobile and there are no reductions.