Department of Telecom (may your tribe decrease!) has recently awarded the spectrum to new players. They did that with aplomb and a lot of hoopla. Mishra ji, of TRAI fame, was needlessly fingered, perhaps by COAI (after being induced by post retirement lollies) that the whole process of awarding spectrum was unfair. So far, there has been no clearity about the methodology to award the spectrum to new players. However, entry of new players is surely going to worry the existing players.
In any case, it would make perfect business sense to cartelise because any fall in the prices would affect all the players together. The new players lack the required experience in rolling out services barring a few established players. Who would pay for the cost of advertisements, getting clearances from local authorites, setting up towers, ordering telecom equipment and the works. I believe that it would be introduction with bundled handsets and in order to survive in the metros, the new companies would play their “better network” card. The value added services are a passe’. Anyone with enough balls and brains would pimp for wireless internet and invest wisely in walled portals; imagine the convenience to shop from your handset and pay via SMS. It would require a generational shift in the way we live and work; nevertheless demand can be created and sustained.
Another wave of cheaper handsets would hit Indian shores. The much hyped Google’s initiative called as Android would pave way for better internet experience and with falling prices of smart phones, it would be an excellent platform for new handsets and better net applications.
I was surprised to see Reliance advertising for mobile blog applications. This is surely a brave thing to do; though their portal sucks. They can’t even get their web pages coded properly to conform to the standards. However, with steep prices per SMS, I wonder how many suckers would like to air their thoughts. I am sure that it would loose it’s steam soon. Or unless, Mr Money bags really wants to burn up huge pile of cash anyway advertising.
One burning question. Would the entry of new players really lower the prices? TRAI has mandated the phasing out the Access Deficit Charge payable to BSNL. In effect, that would make the calls cheaper if the existing players decide to pass on the benefits to the subscribers. I have my doubts about that because BSNL would go down fighting as the access deficit charge reflects in it’s annual profits; some MBAs (see I told you, I dont like them) conceal it as “earnings”. The new players would want to recoup their expenses and play the volume game. I doubt, really really doubt that the claimed 25paise for the local call would ever materialise. It’s like pulling out the rabbits from the hat and then claiming it’s magic.
Lets wait and watch.