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2G Telecom Scam India: Excerpts from PAC Report

Abhishek — Mon, 02 May 2011 05:20:08 +0000

2G Spectrum scam is huge; to the tune of thousands of crores cheated from public money. The specifics are still sub-judice; however, I am linking to the the “leaked report” which has been extensively reported in recent times by the lay press.

The entire article can be viewed here; although I don’t wish to skip over the juiciest parts (and something that I have always mentioned in this blog that is patently wrong with the auctions and the way it has been handled).

On First Come First Served Basis:

The Committee note that the First-Come-First-Served (FCFS) basis for the issue of Licences and Allocation of Spectrum has been followed by the Department on the argument that the announced UASL guidelines have made it open for new licences to be issued on continuous basis. The Committee’s scrutiny of the records reveal that in the Basic Service Licences guidelines, there is a reference to FCFS but nowhere in the UASL guidelines, the term FCFS has found a mention implying thereby it has no sanctity. In fact, on 24th November, 2003, the then Minister of Communications and IT had approved the Department’s proposal to give licence Spectrum on FCFS basis, but it was not codified in the UASL guidelines. Thus, there has been no such legally established principle as ‘FCFS’, at best it can be termed as a prescription to be followed for grant of licence/Spectrum…….

On Role of Media:

The Committee note that the brazen irregularities in the allotment of 2G spectrum and UAS licences were unravelled by some investigative journalists much before the Radia tapes came into the public domain. A journalist who played a stellar role in exposing the irregularities, on being asked about the sources of his information, replied that the information was collected through the RTIs and from some public-spirited insiders…..

Presumptive Loss:

….Intriguingly, neither the DoT nor the TRAI has quantified the precise loss. Unfortunately, the DoT instead of admitting an unconscionable act, advanced the plea that theoretical exercises based on economic modeling are fraught with simplistic assumptions and that no methodology can be suggested by them to calculate the loss…..The Committee feel that giving dual technology licence to the CDMA operators and new UAS licences in 2007-08 at a price determined in 2001 was not only imprudent but also smacks of a design.

Shortcomings in the Implementation aspect:

….While the first phase was implemented, the second phase was conveniently and intentionally, as subsequent events substantiate, overlooked. In the process, devising an efficient allocation formula for Spectrum alongwith an appropriate price remained unachieved as delinking the price of Spectrum from the issue of licences was given a go bye, disregarding the Cabinet decision. The Committee are deeply distressed that due to violation of the Cabinet decision and as a consequence of such deliberate omission, the issue of UAS license and allocation of Spectrum in 2007-08 at the price discovered in 2001 caused a staggering, but wholly avoidable, revenue loss…..

The Committee also desire that the price of Spectrum be delinked from the issue of licences without further delay and seek explanations as to why this important decision has not been implemented as yet…..

Role and Responsibility of TRAI:

The Committee note that the recommendations of the Telecom Regulatory Authority of India (TRAI) are not binding upon the Central Government. But it is mandatory for the Government to seek recommendation of the TRAI in respect of matters pertaining to the need and timing for introduction of new service providers and terms and conditions of licence to a service provider. But the Committee are surprised to note that while seeking TRAI’s recommendation on 13 April, 2007 on various issues, the DoT did not seek recommendations on grant of new licences despite the mandatory requirement. Even though the decisions of the Government is final whether to accept or reject the TRAI’s recommendation, not seeking such recommendations at all speaks volumes for the DoTs malafide designs to circumvent the established provisions in the TRAI Act..

So now we know that TRAI basically is a useless toothless regulator.

But TRAI is not above all. So read the following:

Besides, the Committee find TRAI’s flip-flop in its recommendations also contributed towards the Department’s arbitrary and unilateral decisions. For example, in 2003 TRAI recommended that as the existing players have to improve the efficiency of utilization of Spectrum and if Government ensures availability of additional Spectrum, then within the existing licensing regime, they may introduce additional players through a multistage bidding process as was followed in the case of introduction of the fourth cellular operator.

The bad news:

One aspect that engages the attention of the Committee is the fact that worldwide, especially in the developed countries, the licensing and Spectrum related functions are actually performed by the Regulators and not by the Government unlike in India. The Committee consider such a practice as one of the main reasons for the DoT’s arbitrary decisions in dealing with the consultation process with the Authority.

The big players have engaged the Department of Telecom and the TRAI executives get exemplary post retirement benefits as fancy board members. Of course, they are there to liaise with the existing bureaucrats setting up huge questions on conflict of interests. I really don’t know whether these clauses are in built in their “rules” but if you look at the RTI applications to make their assets public, these faceless bastards need to be more accountable. Not all of them are like that but the blackest of the black sheep are bringing a huge shame to rest of the community.

Pathetic. Ours is totally a banana republic.

On 3G Spectrum (Which I personally feel has been “over-inflated”):

The Committee are happy to note that the auction of 3G Spectrum through an open and transparent bidding process has established the true value of the finite scare resource. However, as apprehension has been raised at many quarters that by paying such hefty amount to get 3G Spectrum, the successful bidders might pass on the burden to the consumers, the Committee impress upon the TRAI to keep a watch on the development in this regard and protect the interest of the consumer in tandem with the DoT.

Hope you are feeling bad enough by reading this sorry state of affairs.

‘Raja manipulated Telecom Commission’ (hindu.com)
National Spectrum Act proposed (hindu.com)
2G Spectrum .CAG Report. (ramanan50.wordpress.com)
2G-Criminal Conspiracy Charge against Essar,Reliance Communications? (ramanan50.wordpress.com)
PAC draft report puts 2G loss at Rs.1.90 lakh crore (hindu.com)
Charge sheet identical to CAG findings (hindu.com)
Arun Shourie to appear before CBI on February 21 (hindu.com)
US Highlights 2G Scam is Unhealthy For Indian Telecom Market (telecomjunction.wordpress.com)

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Verizon’s LG VL600 USB LTE Modem Reviewed – Nice Speeds, Though Software Disappoints

Abhishek — Tue, 08 Mar 2011 13:05:07 +0000

Last December Verizon launched their new LTE network, offering speeds anywhere from 5-20 Mbps to approximately 100 million users in 38 markets and roughly 60 airports. The initial launch included USB modems only — smartphone LTE service isn’t intended to drop until mid-summer. Verizon offers two USB modems, the dual mode CDMA/LTE LG VL600, and the travel-ready GSM-capable Pantech UML290. Ars Technica has decided to give the LG VL600 a review, calling it “awfully fat” for a USB dongle while arguing the included software is a dud — but finding that speeds consistently impress. At those speeds, Ars notes they were very aware of the service caps:

Still, it’s hard to resist Verizon’s offering once you experience those speeds. During our testing, it was easy to forget that we were even using a wireless connection, which speaks well of the data speeds, but isn’t quite so friendly to your download cap. As we mentioned earlier, a 5GB limit is a lot easier to respect when you’re getting slower speeds (like, say, when using Verizon’s 3G network).

But at something around 20Mbps, you may find yourself going over that limit sooner than later. 10GB is probably a more comfortable limit for anyone who will be using the dongle for more than a few days a month, but then you’re also forking over $80 every month and don’t get to share the connection with other devices (unless you do so manually via your computer’s Internet sharing settings).

The VL600 is $100 after a new 2 year contract and online $50 rebate.
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Tata Telecom: Sinking ship

Abhishek — Fri, 11 Feb 2011 09:27:43 +0000

Ratan Tata got a lot of flak for his association with the corporate PR specialist; per se the association is not illegal but motivated agendas are. He’s the head of Tatas who had earned a good corporate reputation over the years with the tag line, “We also make Steel”.

Over the past few years, they entered into Telecom; bought over VSNL for their broadband and international telephony needs, misread the market, entered into CDMA and then forked into GSM with two competing brands- Virgin Mobile and Tata DoCoMo. While Virgin Mobile had it’s CDMA avatar (now in GSM), Docomo is spearheading it’s 3G foray.

In all the hoopla, it has carved a niche for itself by being an idiot and super idiot at the same time. There is no parallel in the world (not to my knowledge) where a same company would fight for the same customer pool. Leave aside it’s mobile business (which is opaque as far as the revenues are concerned), it’s broadband strategy is in tatters.

Hence when Forbes India came up with the cover story on Tata’s Telecom strategy, I was eagerly awaiting the web version because this crap is not worth the paper it is printed on (and hence not worth the money spent on this tattered crap rag). I was proved right when the “journalist” in question hammed on the same issue time and again; perhaps without even realizing that one needs to have an in-depth understanding of the sector. The title says a lot about the “telecom strategy” but sadly these morons on Forbes have restricted themselves to “mobile segment” alone.

I refuse to account for the sector changes or even track the people involved in decision making. This is not my specialty or my interest. My only interest is to get a better deal as a customer; see it through the prism of my own understanding and spout out my “wisdom”.

The whole article talks about the sectoral changes due to Mobile Number Portability or Spectrum charges being traded in “business publications” elsewhere. It does not make even one fucking cursory mention about it’s strategy elsewhere; where it has met it’s waterloo and has been drubbed by customers square- Broadband.

I don’t understand; really don’t understand as to why these idiots cant scale up the platform. They have DTH; they make tonnes in carriage fees (as per the media reports) and burning huge amount of cash in customer acquisition. A proper broadband access (and a portal) with content cross ported from DTH (if you take care of the license issues- what the fuck is their army of lawyers doing?) and you have a sure fire recipe for success.

Of course, this has to come with a balance of right targets and marketing. Last mile access alone is a major issue but not for the class B and class C cities and towns where they could have become the default broadband service providers. But because it needs funds, long term vision and skill of execution, Tatas are found wanting.

Forbes India disappoints me. Not that I had expected a stellar reporting from them but at least SOME bloody semblance of balance in the story. It only points towards the idea bankruptcy, lack of sectoral understanding and oodles of stupidity.

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Mobile Number Portability: Some numbers

Abhishek — Sun, 30 Jan 2011 02:11:39 +0000

There is a huge variance in the numbers being reported by different news papers. One of the major fall out of mobile number portability is that you can spite your existing telecom operators face; if you are a high value post paid customer, it would be worth it.

We would never know the true numbers because they would be under reported. DoT would not get in the game and the right from the word go, everyone is claiming that mobile number portability is a no show. I disagree. This is one the huge game changers in the long run and once the hoopla settles down, it’s best to switch providers. I would want something like Google Voice (one number) and get rid of the crap services but I am destined to suffer at their hands.

This also means that I have the full freedom to shift over to rival networks who would provide a better seamless coverage for that occasional data access.

Business Standard has a full page story on this issue It says:

The biggest loser was Reliance Communications (both GSM and CDMA), followed by state-run Bharat Sanchar Nigam and Tata Teleservices (CDMA and GSM). Reliance lost 9,837 users, while 192 chose to join its network..

So, no one likes Reliance Telecom. Anil Ambani, here’s one for you; how not to run a damned network.

Industry experts feel MNP will not be a game-changer. Even operators are not expecting the churn due to MNP to be more than one per cent, as against the current rate of four-five per cent. This is based on their experience in the Haryana circle, where MNP was launched in December. Haryana has seen a churn of about one per cent.

Where the F these experts come out from? They are either some way side idiots or “consulting firms”; would the news paper please stand up to explain who are these experts who have been quoted?

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Tatas: Selling their soul

Abhishek — Mon, 15 Sep 2008 11:41:45 +0000

Poor idiots! They had to sell to DoCoMo, a leader in the 3G services. With the policy as announced, the duds had it in them. They had to sell out to the highest bidder. Very soon, the whole landscape of the Indian telecom would change. We would not have homegrown company like Airtel but instead this would be a battle ground for the big global majors to fight it out for customers.

The size of the deal is pegged at $1.5 billion (about Rs 6,700 crore), translating into a $6-billion (Rs 26,000 crore) valuation for the company that runs networks across the country and is planning to expand into GSM mobile services in the near future. Tata Teleservices is a loss-making company. Between 2005 and 2007, its cumulative losses stood at Rs 5,604 crore

This India story has been done to death many a times. There is no real addition of the 8-9 million customers per month. It is simply not possible. Most of the metros have choked and jammed. It is saturated. In order to expand into tier B and tier C cities, telcos need funds and assured returns. For all practical purposes, I dont forsee the market “hot and happening”; although the 3G services would assure monetised returns and would ride on the value added services.

It is no secret that Tatas claim their superiority of services based on some abstract benchmarks. There are people who would swear to God not to ever think of Tatas as their service provider. Frankly, TRAI has been unable to implement its own customer friendly norms; trying to get anything out of the useless idiots manning the customer service is a herculean task in itself.

Tata is a weathered story. They have lost it and the writing on the wall is as clear as the sunlight illuminating the dark dungeons of their minds. Telecom is a failed venture and they ought to accept defeat and ship out of business.

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RCom India: Soft launch

Abhishek — Mon, 04 Aug 2008 11:37:52 +0000

Media reports are rife about speculation that Reliance Communications (RCom) has had a soft launch of their GSM mobile business. They have awarded a huge contract to Huawei (stupidity) and is being financed with Chinese money to expand their services. Incidentally, they own the company to lease out the towers for both the CDMA as well as the GSM services. It all remains in the “family”, so as to say. It’s pretty incestous.

I am eager to know about their service levels as well as their plans. They had shaken up the mobile industry earlier in their avatar and the space is all set to grow. Lets see how this unfolds.

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Virgn India Mobile: Grey areas

Abhishek — Fri, 14 Mar 2008 15:23:21 +0000

Mobile Virtual Network Operator or MVNO is a “backdoor” entry in Indian telecom. Indian laws don’t allow this at all. Yet, Virgin India “tied” up with Tata and leased out their spectrum (? perhaps) and advertised here. Tatas claim that this is just a rebranding exercise. The email from the PR department didn’t sound so.

It has been a fiasco. Tatas feel that they can roughshod over the existing laws and garner a share of suckers who feel that it’s cool to get paid for incoming calls. Bah! How naive can people get? I believe, that one has to pay something upfront to “activate this service”. In any case, this is only product differential they have in an increasingly crowded market. With the eminent launch of newer services, this segment of consumers would surely weigh in gimmicks like these to purchase.

Their offer of handsets sucks. Although, this is good news for those who swear by CDMA. Department of Telecom has referred this matter to TRAI to look in the legal aspects of having Virgin Mobile.

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Spectrum: Who wins the game?

Abhishek — Sat, 19 Jan 2008 15:39:19 +0000

Shobhana Subramanian of Business Standard has concrete numbers about Reliance winning the game of spectrum wars. Worth reading. Except for the fact that I had raised the same issues in my earlier posts and now you know why I was dead right about Ambani making it really big.

Apart from maximising the revenues, GSM would help them to acquire more customers. I am sure that they would want to leverage the power of GSM and CDMA networks and introduce consolidated billing. For example, they could offer wireless internet on CDMA and voice calls on GSM; some kind of a switching mechanism could be developed.

Unless Anil Ambani wants to call it quits and screw up. Who knows?

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Indian Telecom: Spectrum war hots up

Abhishek — Thu, 13 Dec 2007 15:31:51 +0000

Airtel upped the salvo by offering 2000+ crores for the spectrum. This rattled the Tatas (who own perhaps the worst home ISP business) and Reliance and a full fledged media war broke out between the two “giants”. Tatas (and Reliance) claim that the GSM operators virtually got their spectrum for free and they should not be asked to pay for the same. They also want a technology neutral criteria for the telecom services; CDMA or GSM. The existing telecom operators are obviously shit scared of the new players in the market and hence the churn.

Let’s look at this from a different perspective and why the entry of Reliance and Tatas would affect the existing subscriber base. The telephone number portability has been announced and the plan would be affected perhaps by next year. Reliance and Tatas would roll out their services pronto pronto since they already own much of the infrastructure in form of manpower and physical assets. The GSM operators have gagged together in their rag tag association (even though their unity is in doubt) and are in effect an effective oligopoly. The entry of new players upsets their apple cart and they would be forced to introduce newer services to make themselves relevant.

On the other hand, this claim could be contested by the CDMA lobby because they have not done anything extra ordinary with their services. For example, no one single operator has a single sec pulse billing which benefits the customer. Suppose you talk at a strech for 5.03 minutes. You end up loosing the extra 57 seconds that remain unused. These are the extra seconds that are charged for without any accountability.

It isnt that the fossilised babus are not aware of the situation on ground. They have chosen to stay shut because their telephone bills are paid for by the taxpayers money. In any case, most of them end up being telephone consultants just like ex TRAI head Pradeep Baijal has done.

Hence, to round it off, I must admit that unravelling the telecom mess is bit like understanding a woman’s mind. I am not an expert but prefer to see things the way they affect us.

As the year draws to a close, the confusion in the telecom regulations persists. The ordinary paying customer is at the recieving end. As usual.

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Indian Mobile Telephony: Mess galore

Abhishek — Sat, 24 Nov 2007 15:26:50 +0000

This was to be expected. The spectrum issues played out in the past fortnight in full public glare. I was following up the story in the mainstream press and this makes for a fascinating read; specially the way it brings the “saas bahu” serials to shame. It gave enough grist to the “telecom” specialists to throw their hats in the rings and make lofty pronouncements.

A quick low down of the ensuing events. According to the norms, the spectrum would be issued to the companies who garner the maximum share of the subscribers. This means that apart from the bloated number of subscribers, the whole mobile user base is a BIG suspect. The specturm wars broke out in the public because Raja wanted to ration the scarce resource and act God. There are often shispers of BIG money floating around but then that isn’t the focus of this write up here. At first, the government decided to relax the norms for spectrum allocation. In the meantime, it allocated 10 Mhz of “free” spectrum to the two upgly sisters, BSNL/MTNL. This was challanged by COAI, the motley coalition of the private telecom operators in TDSAT, which is tribunal body to decide the disputes. To add to the confusion in the midst was the huge number of applications that waited to get their turn for spectrum allocation. DoT decided to issue letters of intent to the new players.

In the meantime, the media jumped in the fray and raised the issue of 3G licences and there were various interpretations of the original licencing norms. Government of India thrives in controversy and no wonder that it was very happy to roll in the mud. The motley association was split right through the middle and they could not get their act quite right. After a couple of days, COAI made quiet noises about “settling” the 3G row.

Now comes the icing on the cake. Reliance got an entry in the GSM club by paying a paltry sum of 1600+crores and got their CDMA licence converted to some kind of a “universal access” crap. Whatever that means. Reliance’s entry in the cosy club and hence the scarce spectrum being gifted on the platter was too much for the association to digest. Anil Ambani and the rest exchanged verbal duels clothed in their gobbledegook. In other words, both the parties were fingering each other. When the war of words went out of hand, the DoT wanted to play Godfather and summoned the chiefs of all the telecom companies to “thrash out a solution”.

Raja realised that the game was clearly up and set up a shadow boxing competition. In effect, to announce as to who is the boss. Since there was no consensus on the telecom chief’s meet, he decided to get the PMO involved and had a smiling manmoron to back up his decision.

Thus ended the saga of the “spectrum wars”; the last word isn’t written as yet. I would wait for further news to unfold in the near future. Nevertheless, the mess persists and the ultimate looser is the public exchequer. Without going in detail about the merits of the case, I believe that this telecom mess would tangle itself like a hydra headed monster. No respite!

As usual, the watchdogs were quiet and it was only Business Standard who spoke out at length about the mess around here.

Phew!

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Indian Telecom:Shift towards GSM

Abhishek — Sun, 28 Oct 2007 05:06:08 +0000

It was coming. I have been proved wrong on very few occassions (a fact that I am proud of) and one of them was about CDMA. CDMA is an acronym for Code Division Multiple Access. This was promised to be more lucrative for the telecom service provider as it enabled them for a quicker roll out. However, the patent owner Quallcom earned a revenue from every sale of the handset making the quicker roll out far more expensive as compared to GSM.

The recent shift of Reliance and Tatas towards GSM signals a “victory” for the spin doctors of the GSM lobby. With further and incremental improvements in GSM, the so called, 3G technology promises better data transfers which was presumed to be THE advantage of CDMA over it’s GSM counterparts. Rightly so. I have seen streaming video on my old trusty Samsumg Reliance handset which was unheard off for GSM. They had a dedicated portal for the colour handsets and as early as 2003/04 it was a ‘status symbol’. They cost a cool 25k for a brand new handset.

Much has changed since then. I have opposed CDMA on the grounds that expensive royalty payments could be avoided by shifting to “open source” GSM or develop an indigenous mobile platform on lines of CDMA. The telecom companies could have easily developed a system for mutual use. The differentiation factor could have been the service levels or the value added services et al. Since we are a nation of bumbling morons, this did not happen.

Many eyebrows were raised at the way Reliance and Tatas were asked to pay up money for the new licences. The GSM lobby cried foul (rightly so for the first time) at the way these companies have been favourited. Reliance had even set up shell companies like Cheetah Telecom (can’t they think of something better?) to buy out the spectrum and hence scale up their valuation with the scarce resource.

Given the mess in this sector, it is obvious that Department of Telecom is going to play God for obvious reasons. The gold rush for the spectrum is still on and not surprisingly the GSM lobby is themselves to be blamed for. They had opposed the auctioning of spectrum when Ratan uncle had proposed this. The present mess is for all us to see.

Hence this is indeed a matter of speculation as to how this would sort itself out. We are all there to see the bloody circus out from the ring.

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Indian Telecom:Spectrum issues

Abhishek — Tue, 24 Jul 2007 06:34:01 +0000

This is stuff straight out of a textbook on how NOT to manage assetsat your disposal. At heart of the matter is the warring Department of Telecom and other side of the fence is Ministry of Defence. Both sides are the babus with their dog eared files lablelled as “classified”. The DoT wants the spectrum to be freed and hence revenue for the Government. Ministry of Defence says that till the time it is allocated a secure systems for it’s own communication needs, it would not vacate 45 Mhz of spectrum.

Recently, members form both fixed line and CDMA clashed with the representatives of GSM lobby and blamed the present mess because of the inherent inefficiencies in the network. There was a war of words and the battle spilled over in the media. Both sides claimed spectral efficiencies and both sides were crowing about the number of their subscribers as a testimony to the fact that their side of the story was better.

Whom to believe? The nature of the arguments borders on insane and technical and I shall try and explore the issue at a later date.

Ministry of Defence invokes the holy cow of defence which means that all babus irrespective of their departments shit in their pants. No one wants to be seen as a party to be compromising on national security.

The bosses call up the media houses and I suspect that the frigging spineless bastards have a hack to take down their dictation on phone. At times, they are happy to publish the press releases as “news”. No wonder, the tone of the news painted the Defence ministry as the villian as if they are holding the “phenomenal growth” of Indian telecom to ransom. 5 million subscribers per month? Wait till the Ministry gets an idea to call for authentic numbers after the verification of subscribers. Perhaps then, we could get an adequate number in perspective.

And that would definitely puncture the fancy valuations and grandiose assholes sitting up on top of the ladder.

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Late night thoughts

Abhishek — Thu, 15 Mar 2007 16:08:37 +0000

Hutch has finally made a deal with the Vodafone (and supping with the devil). Vodafone would have something exciting to show to it’s shareholders and the the man in the eye of the storm until recently, Arun Sarin, would feel less constipated. All in all, a good deal for the Ruia’s who until recently were a failed business house, who must be thanking the heavens for a sudden windfall. All in all, this has only focussed the limelight on the complicated share holding pattern in Hutch.

So expect a new “wave of advertising” crap to be unleashed soon with the “re-branding” of the merged identity. Hutch changed it’s colours from Orange to Pink with an expensive ad campaign in order to ” re-energise” their brand image without any corresponding improvement in their customer service. I have been mailing and requesting their customer care to look in the issue of some network glitch in the place where I work without any response from them. Perhaps they don’t think that it is the customer that matters the most. I have been forced to give up my number and shift to Airtel.

Shifting to Airtel was without much of a hassle. Although, their Interacive Voice Response System tends to drone on for hours together. So far, there has been no complaint about the network and my request for keeping me out of the advertising spam has been fairly adhered to. Otherwise, with them, it is a continuous barrage of messages, much like the spam I get here to increase the size of my privates (as if it would really make me a better lover!). Mercifully, they have not yet stooped to such lows.

In my opinion, it would make sense to finally issue the orders for number portability (something that has been introduced in Canada recently). Perhaps in the future, with the unbundling of local loop, we might be able to choose our own ISP’s. However, issues which are “customer friendly” are hardly adhered to and this is something that I have been stressing here often.

I was surprised to get an email from VSNL which insisted that they wanted to discuss some issues related to the blog and wanted to set the record straight. They wanted my contact details; I asked them to follow it up on the email. So far, they haven’t reverted back.

Interestingly, VSNL Broadband seems to be on the Sify way and I fail to understand that why don’t the Tata’s see the clear writing on the wall to ship out of a sector that they have bungled. I have always held this notion that they would perhaps sell out at a later date. Of course, it would be a usual media circus and despite the old bag of tricks, it is the GSM lobby that is persisting over the CDMA players.

I believe that much of it has to do with the exciting range of the handsets available which limits the choice with the CDMA players. Plus, the high royalty fees that they have to pay. In my opinion, it would have been worthwhile to sink in a few crores to set up manufacturing units or own system of standards instead of paying the royalties. So much for the “management gurus” who mouth the prescriptions so passionately.

Some big mess! It would take ages to untangle the whole thing that we have landed ourselves in.

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Tata Indicom is pathetic

Sushubh — Mon, 08 Jan 2007 12:08:45 +0000

Ok. My cellphone has totally freaked out. I need to shift my number from the old Tata Indicom handset to a new one. Since it’s a CDMA based phone, I had to go to the Tata Indicom support center in Gurgaon. They just have one of those in the whole city.

It’s hard to find parking in the area around the mall where they have their official setup. We went there. The dude did the required changes in the backend within 10 minutes. All good.

Umm. Not really.

He told me that the shift would take a maximum of 12 hours. First the old handset would stop working and after a while the new one would start working.

If the new one does not start working within that period, I would have to visit them AGAIN to get it programmed. They cannot program it right away for some god damned reason.

Within 10 minutes, the first cell phone had stopped working. The new one does not work still.

Knowing Tata people… I WOULD have to go to that mall to go to their showroom to get it programmed. Like I did it the first time I got the connection.

I am complaining because when I took the connection, I ASKED them to give me a SIM based CDMA connection. They lied to me and gave me a Simless connection. So, I am dependent upon them to get my handset changed. I am so totally disappointed in them.

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The year that was

Abhishek — Sun, 31 Dec 2006 04:36:12 +0000

I hate to end on a pessimistic note.

The year 2006 was in many ways a sad reflection on the telecom trends. We haven’t been promised the Mbps speeds; Reliance isn’t scaling up; Airtel is becoming slouchy like BSNL; BSNL has refused to up the stakes for others; TRAI is being subverted and we are seeing an all out war for consolidation of oligopolies.

The consumer, i.e. you has already won the asshole of the year award and this isn’t the right tone for shifting in a new year. How so much I try, I hate to admit that there is no “India shining” anywhere around here. Not atleast with the Congress in power.

Yet, the promise is around the corner. We would be f***ed harder for our hard earned money, the congestion in the networks is bound to grow and with the increased entry of the telecom majors, our national security is up for a song. A country like Pakistan just has to turn off our vital communications set up and we would be on our knees in any time.

If I can see the “predictions” right, Reliance is going to slow further on it’s landline business. Arguably, it is a business proposition which is on a loosing wicket; BSNL’s monopoly is well entrenched. Reliance’s CDMA business is not giving it’s returns (I suspect) which should have been well profitable much more than their expectations. GSM provides the scale because it makes it easier to fudge with the sale of the GSM cards and show increased number of subscribers. Its all about valuations and gloating rights.

Much of it has already been explored in the earlier write ups.

What we basically need is the power back to the consumer to take effective decisions.

As we move in the new year, the sale of Hutch is imminent. There are many suitors for the slut and who gets the “cake” is difficult to predict. It’s making headlines for all the wrong reasons. Whether or not it is the “new wave” of Indian Telecom is for you to decide.

On the high note, most of you have asked me about the swearing on here. I believe that this delivers the message far more effectively than saying that I am frustrated by the lack of serious pace around here. Our collective wisdom collapses like the Indian cricket team; which in my opinion mirrors the Indian psyche effectively. We are all bunch of wimps when it comes to taking effective decisions for ourselves.

I believe that the next thrust of the growth would come from the wireless Broadband (or whatever crappy name you want to give it). As the telcos scale up investments in “air” (literally), the growth of Wifi would perhaps mirror the growth in the number of subscribers. However, with a low user base of laptops or access points, I may be contradicting myself. WiMax is all hot air though.

As for the BSNL Broadband, the promised Mbps speeds are in order. Though they are only offering it for Bandwidth on Demand. The unlimited plan subscribers are out of the ambit for the time being. I think, the games portal would be up soon and we’d see even higher latency times for them. IPTV has made it’s presence felt this year; I still have to get a positive feedback from the users. If this is not backed up with a portal for one access, it would be a sheer waste for access. Indians aren’t really getting around and spending cash online. It would need a technology enabler to make this happen. Much like the IT hype (which is of no fucking use to this nation), the telecom hype is bound to peter away.

Sigh.

Still, I hope the new year brings forth happiness and cheer in your lives. For me it is majorly a chnage of calendar; I still have to go for my rounds tomorrow!

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Hutch: Sale of the year?

Abhishek — Tue, 19 Dec 2006 15:35:52 +0000

It may be a good news for Ruias who hold a stake in Hutch Telecom. Their windfall would be in billions, if at all they decide to sell their stake. By all possible indications, Anil Ambani is keen on buying out Hutch’s stake and propel himself to the “top” of the heap. It would give him a ready access to the GSM subscribers.

In my opinion, if I am right, Ambani would drive his CDMA in the rural hinterland given the price advantage that CDMA can afford. GSM would be his mainstay in the cities- the erstwhile Hutch driving his brand strategy. Plus give him access to the lucrative Mumbai market with a ready made subscriber base.

Airtel’s Mittal doesn’t want to loose this golden goose and wants to convert Hutch into another crappy service provider called as Airtel. It is all about the subscriber base isn’t it? Millions and millions? I am sure that the valuation would be far less than that is being reported in media. Media of course, has it’s sources but then one can never trust them. Hence, there are wild figures being quoted; in the range of billions.

The excat quantum of payments made would perhaps be never known. These are private companies and their shares are not publicly traded.

Ruias ran ESSAR steel which ran in debts. They were another wannabe big shot industrialists who just happened to invest in telecom as an afterthought. It clicked.

Why is it a bad idea for Hutch to be sold off?

I believe that it would create very strong oligopolies. As it is the companies don’t give a hoot to TRAI, the so called regulator. Further, these oligopolies would resist any consumer friendly initiative. Primarily, number portability. They would see the churn and shift of the subscribers would need additional investments hurting their “profits”. Ambani, like a rampaging maniac, would turn this company into another ‘reliance’ and make a mess of it.

I believe that Government should step in and avoid any sale in the best interests of the subscribers. I believe that the subscribers should have a say as to whom they would want to manage their affairs. We are just quoted as ‘numbers’ and nothing else. A price to be paid for.

On an afterthought. What would be Hutch’s communication strategy post sale to any other company? I would surely miss the pug. Imagine Ambani claiming that it was his “papa ka sapna” (father’s dream) or Amitabh’s voiceover crowing about what Reliance has done. It would be a sorry state of affairs for a company that had the potential to make itself better but screwed it up with lousy plan intiatives.

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New developments

Abhishek — Sun, 05 Nov 2006 15:10:04 +0000

These are the changing times. For sure.

This quarter has seen some record profits being posted by the telecom companies. How much of it is financial jugglery? I wouldn’t know. It is hard to believe the absoulte (or estimated numbers) of 115 million mobile subscribers and I would keep my negativism intact.

Reliance is revamping it’s operations. Arguably the days of megabit speeds would possibly take eternity and it’s broadband remains moribund. 150kbps unlimited? How can they market it as ‘broadband’? In the mobile space, Reliance is advertising a slew of handsets- aspirational stuff for the common masses indeed. The low prices are mostly for the Chinese handsets and my guess for it’s longetivity is as good as yours. The handset majors seem to avoid CDMA like poison and the real action is still in the GSM space.

Spice Punjab has seen major acquisition by Telekom Malaysia and they would be majorly using this inflow of money to upgrade their congested networks. According to a source, it would take roughly 3 months to start the due process. Meanwhile, Spice is planning to acquire licences for other circles. No doubt it would take time and efforts to update the whole due process. I shall keep you posted about this company. Primarily for a simple reason. It had perhaps one of the highest ARPU’s earlier on because it was the sole service provider in Punjab market. Things went on a downhill slide when Airtel, backed by Bharti, went on a major offensive against Spice. Spice has augmented it’s revenues by bundling the services with it’s own manufactured handsets.

MTNL has introduced IPTV and is charging 300 per month for free to air television shows. I haven’t seen IPTV ever in real time so it would difficult to pass any judgement on the same. BSNL has introduced gaming services and it seems to be nominal. The best part is that the gaming services donot get counted in the final bill or the data downloads so it should appeal to majorly. Unless of course, they put in the crappiest servers with a huge lag time. So by the time you poit and shoot your enemy, you are already dead!

BSNL was to announce a mega tender for it’s GSM lines which got nixed in the Delhi high court. I believe it was Motorola which was the aggrieved party. Strange. Had it been for Airtel (which announced the deal with Nokia), there are usually no court hearings. I am sure there is something wrong somewhere.

One India has been rejigged and relaunched with full page advertisements crowing about the “achievements” of the present government. It isnt worth the price of a toilet paper even with the foreign bitch’s face on it.

Reliance is offering Mobile blogging platform. You could see a lot of idiots trying to post in from their mobiles. Sure they would and then crow about it.

DTH is still not seeing the volumes to break even. However, the cable operators are running around scared kittens. They have reduced the monthly rentals (by underdeclaring the subscriber base) and surprisingly, the complaints are attended to. I am planning to go in for a DTH; though I am waiting for the market to throw up a clear differentiator from the existing players. Lets see how things work out.

Reliance is planning to launch the GSM services (apart from the North Eastern States it operated in). It may sound illogical thing to do but I am willing to go in by the GSM lobby that it works out to be cheaper as compared to CDMA. Even though CDMA as a technology is better than GSM. Does it mean that consumers would get more choice? I doubt. Though I do know that Anil Ambani has a lot of cash to burn up.

Bangalore is getting wireless internet connectivity in select areas. Mind you, it can’t solve it’s civic problems as yet.

On the personal front too, I am firmly entrenched in Radiation Oncology. I wish I could blog about it full time including the case discussions et al. However, the present state of affairs leaves me little time for anything else.

I do hope that I am able to update this blog on a regular basis. Though as usual, it is the RSS feeds that make sense. Thanks for sticking by and seeing through. I really hope that things change for the better.

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Indian Telecom: Changing fortunes

Abhishek — Sun, 01 Oct 2006 10:59:18 +0000

Well, I was right in a way. Indian Telecom firms want to get back to status quo on the “controversial” 74% increase in FDI. The increase in FDI limit, in reality comes with numerous hassles- chief among them is the interdepartmental cooperation. Having a foreign CEo wouldn’t really alter the landscape for the company’s balance sheet. Ask the Tata’s who must be questioning the logic of jumping in the fray with below par services.

Come what may. Luckily, there have been some intelligent souls in the Department of Defence/ Internal Secuirty/ Home Affairs, who have spiked the claims of Indian Telecom firms and are really concerned about the ease with which new connections are available- a significant security risk in the absence of proper documentation. They have been tightening the noose around the companies’ necks and it’s producing the results.

Whatever may be the specifics, Indian firms are on verification spree. They have identified that one third of their so called “cusotmers” are fake and instead represent that section who have booked multiple connections in fictitious names. A major reason was to bag the frequency which is based on the archaic conecpt of having more customers.

The increasing numbers have their own tales. The recent spat over the allocation of 3 G frequency should be seen in this light. Previously, it was widely assumed that a beauty parade would be held which would make it “attractive” for allotment of the frequency based on the number of “millions of customers. 3G handsets are still terribly expensive which is beyond the reach of most of the people. Plus the famed Internet on the handsets hasn’t excited many due to lack of applications. 3G has been technically a non starter.

It now seems that an auction would take place. Keep peeled for the updates here (as and when I have time!)

It now seems that the frequency hassles are a concern only in couple of Indian cities. Pan India, the present frequency allocation can be easily managed and accomodate more subscribers.

Reliance is betting big on GSM and has recieved licences to the same effect. Part of the reason is supposedly cheaper cost. I always held the belief that CDMA was a better platform for Data access and hence could support wider applications- R world is a proof of concept that mobile applications can be worked out profitably. Reliance offered streaming videos (albeit patchy pixelated stuff) much before any other company could possibly think of. But GSM? Are they nuts to offer a different platform under the same brand? Just like what the Tata’s did and learnt it the hard way?

It all boils down to the cost of the royalties being payable to Qualcomm for using their proprietary chipsets. Couple this to higher handset development and acquistion costs which is not pushing down the prices for Reliance customers. Anil Ambani is touring China (where else?) to source cheaper handsets. He is also in talks with the parent company to decrese the quantum of royalties- something that should have been negotiated earlier on. In my personal opinion, if they think that they are smart, they could have diverted some funds to develop their own standards either in collaboration or edged on the Government of India, to make it happen.

It hasn’t and they are the loosers.

Meanwhile, I am seeing a new wave of glossy adverts in the media for Reliance. Hard to imagine that a staid company is trying out new gimmicks to make themselves relevant. Young models (all made up with latex and perhaps silicon) are trying in to woo new customers with the promise of something “really better”.

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GSM Hassles

Abhishek — Sun, 12 Mar 2006 08:04:07 +0000

For long, I was stuck on CDMA. Until my Nokia handset went kaput finally and I had the “hobson’s choice”; I shifted to GSM because my folks had free outgoing calls within the group. Reliance has over priced handsets and I have no love lost for LG.

Spice. Among the first few mobile operators. It had licences in Punjab,Karnataka and West Bengal. They subsequently sold off the Calcutta circle to Airtel and concenterated on Punjab and Karnataka.

Priyanka Chopra is the current mascot for Spice. Despite her awful acting/ screen presence, she stares and smiles from bill board hoardings where street dogs pee every day. Including some species of humans. (Humanicus Indicus). This isn’t saying much for a company whose service levels have seen a massive nosedive in recent times. It is often joked that Spice is turning in another Cell One (the “sarkari cell phone service”). It is nothing to be proud of!

Hutch has consistently been showing a good performance. While it definitely trails behind the other operators, people have been sticking on to it like goo on the wall. In other words- loyalty to the company. However, their charges for GPRS access are atrocious which makes it a joke to call it as an access anyway. Rest all, it heavily advertises for it’s value added services and as a result need to re coup it’s ad spends. Stupidity? Or increased ad spends leading to higher usage? I have no firm answers.

However, there was a refreshing change from Spice to Hutch. The customer care numberwent in through the first attempt- a rarity otherwise in Spice. This happened a couple of times. The “executives” or the glorified idiots knew their work anyway. So, less of glorified idiots or higher up in the evolution scale.

Now, the initial impression with Hutch was good. They had a slick welcome booklet and obviously, they have taken great pains to communicate their product.They do have an website- however, painfully slow to respond to any queries. It’s been over 50 hours I sent a mail which hasn’t been replied to. That isn’t saying much for a company at all.

Spice was in the pits. With network congestion becoming worse day by day, it became a routine to see “Error in network”, “No network” et al. It almost reminded me of crashing Microsoft Windows. Just like it gave “fatal errors” and refused to budge. Of course, Linux is class apart….

I hope the impression with Hutch stays good. I d keep you informed

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Tata Indibay

Abhishek — Mon, 06 Mar 2006 16:17:25 +0000

This too has been crossposted in the main Techwhack Channel. I got an insider tip for this one and then worked on to write one on this.

Mobile payments are the next in thing. As so, the marketing crazy executives would make us believe. In Japan, there is a strong market base for credit card transactions. In the presence of a robust telecommunications system, it has made enormous strides in setting up of value added services like mobile payment gateways.

Technically speaking, this consists of a point of sale terminal at the sellers premises. All you have to do is to authorize payments from your mobile handset (by entering the credit card information) towards this point of sale terminal and the whole transaction is routed through a secure socket layer with 128-bit encryption. This would minimize the risk of fraud and the whole transaction is completed in seconds. At the same time, printed receipts provide purchase verification and charge back protection. This is indeed a win win situation for both consumers as well as the sellers.

It seems that the next wave of value added services would be through these mobile payments. Sam Pitroda (the father of STD booths- beyond this he had no other contribution to speak of) would make us believe that Indians are dying to splurge on virtual cash. However, there is no detail on the expected commissions, cutbacks and the cost of the inventory.

By all accounts, Tata Indicom is planning to set up a mobile payment system in India under “Tata Indibay”. The details are sketchy as of now and till to date there has been no mention in the press. However, it is through our trusted insider sources who claim that such a system would be in place.

This may not be taken as authentic news because we have no means to confirm about their business plans as yet. They might as well as scrap the whole deal.

The whole idea is whether Tata’s can pull this off by themselves. Specifically when they would have to install these point of sale terminals across shopping malls, busy markets et al. We all know how Tata’s have been faring in the mobile telephony scene. Not too good. Then to make it profitable, they would need to scale it up. Assuming 10% of the consumers use it and given their share in the market, it would make for a very sorry and costly investment.

The biggest hassle is that of the back end investment. Setting up secure terminals and ensuring their uptime by all times is a costly affair and whether the subscriber base would justify for such an investment. In my opinion, they could “outsource” such activity to a third party, establish industry standards and form an unholy alliance with other operators to provide the services irrespective of the consumer’s affiliations or the independent of the platform like CDMA/GSM.

Is this hard to think? Given the fact that Tata’s have sunk in money in a venture, which is not jiggling the cash registers as of now. Hence, they are desperate to scale up such value added services which would give them some bragging rights in the increasing “me too” market dynamics. It would be worthwhile to watch their venture and see them cringe.

The biggest hassle is the assumption that Indians would loose their purse strings while using credit cards. We all know as to how private banks have been working to force down these cards with their unsuspecting patrons. We also know the high usurious rates of interests, which would even make Shylock blush with embarrassment. The industry as a whole has not been able to eliminate fraud. In this scenario, how can mobile telecom payments are accepted as “e cash”? One incident of fraud, the increasingly hyperactive media plays it up and wham! The whole thing goes down the drain.

The idea behind this post is that in case anyone from Tata’s is reading this, they ought to desist from such glorified follies. I am all for a natural progression and the way India assert itself in the technology markets. However, if you are diverting funds at the cost of scaling up networks in rural India, then there is something amiss. As I mentioned earlier, Tata’s do not have the scale to make it profitable unlike Reliance, which can pull it off while lowering down the prices for all other incumbents. They have these e-ticketing initiatives on “ R- orld” which is closest to mobile telecom payments can get. Plus, the added advantage that the consumers pay for the access through R-World, which again is based on pay per use charges.

I believe that Tata’s do not have such kind of a gateway, which would be hard to convince it’s subscribers that this is a premium service, much like the ring tones, which is charged at premium rates.

There are a lot of factors, which would ultimately determine the success of this venture. I hope, they have thought about this all.

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The year that was

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New developments

Indian Telecom: Changing fortunes

GSM Hassles

Tata Indibay