Vodafone to spend $2 b to expand network in India

Staff Reporter

To set up a $10 m charitable organisation

NEW DELHI: Vodafone, which pledged a $10million investment for setting up a charitable organisation in India, on Monday decided to spend $2 billion a year for expanding and strengthening its network in India.

Stating that Vodafone is also keen on sharing infrastructure with its competitors instead of creating them on its own, Vodafone Chief Executive Officer Arun Sarin said that since the company’s entry into India, its capital expenditure had doubled. “We are now spending $2 billion a year. We plan to cover 90 per cent of the market from 50 per cent now by bundling affordable handsets to reach out to the masses, particularly in small towns and villages,” he said while talking to reporters.

According to Mr. Sarin, Vodafone is likely to share its infrastructure with peers so that companies need not put up their own towers everywhere. This would help Vodafone and other companies expand their network across India. He said there were no immediate plans to go for any acquisition or buying the telecom tower business of other groups.

The Foundation would initially focus on projects associated with providing education to youths across the country, enabling the development of higher skill sets. It would commence work pursuant to the completion of the formal registration process, in compliance with tax and foreign contribution legislation and appointment of trustees.

Meanwhile, Mr. Sarin also met Union Finance Minister P. Chidambaram. On the controversy over $1.7-billion tax liability arising out of the Hutch-Vodafone deal, Mr. Sarin said the company would wait for the court decision on the matter.

Source: The Hindu- Business.

GSM, CDMA players trying to win over DoT
9 Oct, 2007, 0902 hrs IST,Joji Thomas Philip, TNN

NEW DELHI: CDMA and GSM operators are engaged in a frenetic lobbying effort to persuade the department of telecommunications (DoT) of the correctness of their respective views. The CDMA lobby on Monday presented written arguments to counter an earlier presentation by GSM operators.

Late last week, a meeting convened by telecom minister A Raja broke up after the GSM lobby’s presentation on issues such as spectrum allocation and the methodology to be adopted for it was hotly contested by the CDMA-players. Mr Raja had then given the CDMA-players 10 days time to submit their reply.

In their reply, the Association of Unified Service Providers of India (AUSPI), the body representing CDMA players such as Reliance Communications and Tatas have maintained their earlier stance that GSM operators must not be allocated any further spectrum on account of what they described as their poor efficiency ratio.

Replying to the Cellular Operators Association of India (COAI) argument that GSM operators in most of the European countries and even in China were allocated more spectrum when compared to service providers in India, AUSPI said: “We feel that such a comparison is not tenable since the spectrum was available in abundance and there was no other use of that particular spectrum band in these countries.

GSM technology was also in nascent stage and, therefore, required more spectrum than what is required today as lot of spectrum efficient innovations have been developed since then. It may be worthwhile to mention that no spectrum has been allocated in most of these countries during the last 4 years.”

AUSPI also added that COAI’s comparison of China in 1998 vis-à-vis India 2007 was completely flawed and ill-founded as large scale technological innovations have taken place during this decade which has enabled the GSM operators to use the spectrum much more efficiently. The COAI had said that Indian operators’ spectrum efficiency should be compared to that of Chinese players in 1998 as China had a 12-year head start in mobile communications space.

The COAI had said that the current spectrum allocation (where some operators have up to 10 MHz in some circles based on their subscriber base) was inadequate. On the other hand the CDMA operators have told Mr Raja that operators do not have rightful claim beyond 5 MHz in case of CDMA technology and 6.2 MHz in the case of GSM technology, which is their contracted spectrum as per the license clauses.

“GSM operators have already been allocated spectrum beyond this contracted limit, while CDMA operators are still languishing at 5 MHz or below 5 MHz, which is the contracted spectrum for them. Thus, a non level playing field has been created and needs to be corrected without further delay. Internationally, the regulators are moving to spectrum allocation on a technology neutral basis,” AUSPI said.

At the same time, AUSPI has also pointed out that several innovations for spectral efficiency such as Adaptive Multi-Rate CODEC Technique (AMR), Single Antenna Interface Cancellation (SAIC), in-Building solutions-Low Power FEMTO Cells and six Sector BTS have taken place in respect to GSM technology in the recent past. “We feel that with all these innovations in GSM technology, there is a need to bring parity in the spectrum allocation between GSM and CDMA,” the association added.

Source: The Economic Times

DoT to provide no spectrum guarantees

The Department of Telecommunications (DoT), juggling industry demand for more wireless spectrum, will insist on rationing the scarce resource but may relax licence fees that could aid aspiring new players.

DoT is in no hurry to allocate beyond 10 megahertz (MHz) per circle to leading incumbent operators and licence fees do not automatically create spectrum entitlements for new players, a key official told Hindustan Times.  But existing licence holders without required spectrum may soon get their allocation.

“We do not give spectrum beyond 10 MHz. The telecom industry is growing. So the question arises: should I keep some spectrum in reserve for expansion in future, or allocate completely to the incumbent operators?” he said.

India has the highest number of operators per circle, and the number is likely to go up as the new entrants arrive. DoT has received 518 applications for new licences after the Telecom Regulatory Authority of India (TRAI) recommended free entry of players in August.

Bharti Airtel, Vodafone Essar, BSNL and BPL Mobile have already been allocated 10 MHz of spectrum in certain circles but some other operators are making do with less. The incumbent and new operators may also expect changes in the licence fees, which are currently at 10 per cent, 8 per cent and 6 per cent for A, B and C circles respectively.

The official ruled out auction of 2G spectrum in 900,800 and 1800MHz band, or even auction of licences, or any lock-in period before any operator can exit, or any increase in the existing entry fee of Rs 1,600 crore.

 “We do not rule out changes in revenue sharing arrangement. TRAI’s recommendations should fit into the reality of a dynamic telecom industry,” the official said.

Source: The Hindustan Times

Telecom firms keen on 3G to lift revenue in non-voice segment

Despite India being the fastest growing wireless market in the world, adding seven-eight million subscribers every month, the country’s leading telecom operators such as Bharti Airtel Ltd, Reliance Communications Ltd and Idea Cellular Ltd are seeing little improvement in their revenues from non-voice offerings, even as they seek to improve average billings and look beyond voice-based services for more revenues.

Phone firms such as Bharti Airtel, in fact, have seen their share of non-voice offerings go down as a percentage of total revenues.

in March from The share of non-voice revenues for Bharti declined to 9.9% almost 10.8% a year before, according to telecom research firm BDA China Ltd.

In contrast, China Mobile Ltd, which controls nearly 70% market share in China gets almost a quarter of its revenues by offering data services and downloads to its subscribers, says Beijing-based BDA.

Proponents of the so-called 3G, short for third- or next-generation telecom wireless systems that enable faster data access, recommend a quick transition to the technology and start offering services such as audio and video downloads to customers. “3G will allow us to generate more revenues per customer, especially in the metro areas where subscribers are ready to pay for high-end data services,” said Abhay Savargaonkar, senior vice-president for 3G at Bharti Airtel. The company has already done trials on 3G network and “will only take six months to roll out the services after clearance for more spectrum comes in,” he added.

Arpu, or average revenue per user, each month, for Reliance Communications, which currently has around 17% market share in the Indian cellphone market by numbers, has gone down from almost Rs440 in March 2006 to around Rs390 in June 2007, according to BDA.

With the operators now looking at increasing their customer base in rural areas, “arpu is destined to get affected and 3G can help us address this issue by offering more services in the urban areas,” said Savargaonkar.

Bharti, which currently derives around one-fifth of its revenues from rural areas, is aiming to expand its network to more than 500,000 villages by 2010, said Sanjay Kapoor, president, mobile services, Bharti Airtel, last week.

But, the absence of a clear policy and spectrum allocation delays are holding up India’s 3G programme, said Duncan Clark, chairman of BDA China. “At current pace, we do not see 3G happening in the country anytime before end of 2008,” he told Mint recently.

While analysts are blaming the policymakers for the 3G delays, the government, which has received around 300 applications from some 30 companies, including the world’s largest phone firm AT&T Inc. and local realty major DLF Ltd, is yet to resolve spectrum allocation for older generation networks of existing operators.

“The priority is to resolve this first and then look at 3G,” said a senior official at the department of telecommunication who did not wish to be identified.

India has around 241 million wireless subscribers currently, and, with only about 20MHz of spectrum to be made available, existing operators, such as Idea Cellular Ltd and Vodafone Essar Ltd, are scrambling for more spectrum in order to roll out services across the country.

New applicants are unlikely to receive spectrum rights unless the current first-come-first-served policy is overturned in favour of an auction.

Source: live Mint.com

Sarin meets FM; Vodafone awaits court verdict

VODAFONE CHIEF executive officer Arun Sarin said on Monday that the company would await the court verdict on the $1.7-billion tax claim served by the government. The income tax department had served a $1.7 billion capital gains tax notice on the British telecom giant after it acquired Hutchison’s stake in a joint venture with the Essar group.

"There was no discussion (during the meeting) on the notice from the income tax department. The matter is in the court and we will wait for the decision of the court,” Sarin said after his meeting with Finance Minister P Chidambaram.

Hutchison Essar was renamed Vodafone Essar after the UK major bought a controlling stake in India’s fourth-largest telecom service provider for $11.2 billion earlier this year.

Tax department officials maintain that income derived in India directly or indirectly is taxable in the country. “While the recipient (Hutchison) is the final taxpayer, Vodafone failed to discharge its tax liability,” officials said. "Vodafone is the payer in this case. So it has the liability of payer,"  they added.

The company has contested the claim and approached the Bombay High Court.

During his last visit, Sarin had said Vodafone was not liable to pay tax.

The world’s largest mobile operator has also scaled up its capital expenditure plans to $2 billion a year in India and is open to sharing infrastructure with competitors.

"Since our entry into India, our capital expenditure has doubled. We are now spending $2 billion a year," he said.

"We are looking at ways to piggyback on each other's infrastructure to reach out to the masses quickly," Sarin added.

Vodafone has also established a $10-million foundation to undertake social programmes."The Vodafone India Foundation would initially focus on projects associated with providing education to youths across the country, enabling the development of higher skill sets," the Vodafone CEO said.

The company announced plans to cover all 39,000 villages of West Bengal over the next one year -- 30,000 villages have already been covered so far.

Source: The Hindustan Times

Vodafone plans to cover all villages in Bengal

BS Reporter / Kolkata October 9, 2007

Vodafone is looking at extending its network coverage to all the 39 villages in West Bengal in a year’s time from now, said Sridhar Rao, Vodafone CEO - East, at a press conference in Kolkata.

Rao did not disclose investment figures for additional coverage.

At present it covers close to 30 villages in the region.

Vodafone will add close to 60 cell sites in Kolkata.

At present, it has 1,400 cell sites in Kolkata and 1,900 in Bengal.

The company also plans to launch Vodafone-branded GSM phones priced at Rs 1,199.

Vodafone also announced its Durga Puja initiatives in West Bengal for this year, in an attempt to push its subscriber base in the region as well as connect with its consumers emotionally.

For the first time this year, Vodafone will offer live updates in partnership with Radio Mirchi.

Vodafone has also announced 'Jogajoger Utsab' for customers in Kolkata. This would commence with Aagomoni, a musical extravaganza on October 9.

Jogajoger Utsav is also an assortment of products and programmes that includes value-added services, musical evenings, privilege booklets and performances by renowned artists and musicians.

Vodafone will also offer value-added services showcasing Durga Puja pictures, stories, ringtones and callertunes.

Vodafone will also initiate musical evenings across eight locations in the city. These locations will be determined through a contest prior to Durga Puja.

The company will also distribute puja privilege booklets to all its post paid customers this month.

Vodafone Essar now has operations in 16 circles covering 86 per cent of India's mobile customer base, with over 34.1 million customers.

Source: Business Standard

Telecom News dated 09-10-2007