Tag Archive for 'Spectrum'

3G India: Who needs it?

The following is the text of the email sent and an edited version appeared in Business Standard on 06/11/2009.

Dear Sir,

This refers to Shyam Ponnapa’s write up on BS dated 05/110/2009 (Managing Spectrum Efficiently).

The big question. Why do we need 3G? Why not focus on the land line business alone for broadband access? Or better still. Community Wifi?

The arguments for doing away with this are many. Community Wifi is deemed to be a security risk but then countries like Singapore have implemented this on a large scale nationwide. The mobile phones required to access 3G invariably have Wifi access too. Unless, the telecom companies are expecting surefire hits like Apple iPhones or flood of other smart phones to access the Internet, it is not happening.

We don’t have accurate numbers about the likes of Reliance and Tata who are offering their 3G access. If initial reports are to be believed, they are plagued by “line of sight” hassles, ‘network congestion’ and lackluster customer support. To top it all, it has the access limitations which means that broadband access, even on the 3G spectrum would be capped for very obvious reasons.

We have enough bandwidth in the country but as anyone would testify, we have problems in implementing the “last mile access”; having a contentious set of issues like 3G is not going to solve the persistent problem of “last mile access” because no one is interested in sinking money for a long term.

We can have a fair idea from the existing companies like Airtel or Vodafone who charge exorbitant rates under the present implementation of “mobile internet”. What is the guarantee that they would lower down the prices once they pay fancy sticker prices in 3G auction?

3G, would most likely be used for carrying more voice traffic because none of the players harbours any disillusionment about the “mobile broadband” across the length and breadth of the country.
The market for value added services is locked up within the “walled garden” of the existing players; it is unlikely that 3G access would “revolutionize” the content.

This pretty much sums up what I have always alluded here and my opposition to 3G remains.

Department of Telecom: 3G auctions in a mess

DoT has allowed the global firms to try their luck for 3 G spectrum. The existing companies have a lot at stake and are crying foul for obvious reasons. This is different from TRAI’s “recommendations” that only the existing players be allowed to bid for the scarce spectrum.

It’s only going to benefit the dodos flashing their new gen Apple iPhones. Who needs a frigging wireless Internet which can work only in isolated pockets of the four metros? There are enough idiots rooting for the cause and I have a nagging feeling that the existing technologies have not been upgraded to benefit consumers instead. A big sloth, this industry relies on its own lethargy.

The auction is expected to fetch the existing Government crores of rupees which would be funneled in wasteful expenditure and of course line their own Swiss Bank accounts.

Broadband spectrum: Trai favours e auction

TRAI is best known as a regulator that cannot enforce it’s own recommendations. Therefore, it brings forth new regulations to replace the ones it had brought earlier. It believes them to be set in stone and believes that they are timeless. It is with this fallacy, TRAI has remained in existence.

Rediff reports about TRAI recommendations. They may portend the future of the things to come.

Spice Telecom: Snapped up by Idea

Birla’s group Idea snapped up Spice, one of the last stand alone players in the market. Idea cellular is no angel in white. Spice isn’t the best thing to have happened to mobile industry ever although, they were among the initial telecom players to have 900 Mhz spectrum and were the only big players having a huge monopoly for over 3 years. The promoters, Modi group, made huge amount of money. I remember my time in Karnataka when Spice was hell bent on promoting itself as “Southern Spice” and pioneered the use of minimalist advertising.

It isnt a bad deal for Idea. For the intellectually inclined, here is a spiel from Business Standard (although the link is guranteed to go dead soon):

At Rs 77 per share that Idea is shelling out for the loss-making Spice, the latter is valued at nearly 20 times forward enterprise value /ebitda (EV/ebitda) while at Rs 157, TMIL is valuing Idea around 15 times FY09 EV/ebitda. That’s possibly because at the end of the day Idea is a gainer from the buyout; it will be left with cash, which for a telco that’s planning to become a pan-Indian player and is now present in 13 out of 22 circles, can come in handy. So while Idea will pay Rs 2,700 crore for the stake in Spice, it will get Rs 7,200 crore from Telekom Malaysia, leaving it with a net Rs 4,500 crore.

I am jittery about the Telekom Malaysia investing here in India because they are known to be thugs in the big league. Remember the Salim Group which cosied up with the Left Government in Bengal? They paid a pittiance and got prime land at throwaway prices in order to set up “housing colonies” and malls.

This marks the formation of oligopolies although I am surprised that no other company offered better money for Spice considering the fact that mobile portability is not feasible in present times; most of the original subscribers are loyal to Spice irrespective of their services. It would have been a ready pool of subscribers with an efficient spectrum. There is something fishy on for sure.

Did anyone make any noise about the regulatory approval? Would we ever see anti competitive clauses?

Reliance India: Anil Ambani making right moves

After Bharti, MTN chose to court Reliance. It sounds like a whorehouse. MTN is playing the perfect mistress to the hilt and has no compunctions to court customers; all in order to increase it’s share valuation. Reliance is eager to get a hold of their booty because it realises what Airtel doesn’t. It can easily scale up it’s investments in other parts of the world, negotiate for better prices of it’s equipment and telecom gear and leverage it’s investments in entertainment by offering value added services.

Anil Ambani’s fascination seems to have stemmed in from watching too many movies (1,2) and his scaling up his investments in Hollywood as well as his maiden venture Big Flix Spearheading these investments is Amit Khanna who is a failed producer of Hindi movies.

Entertainment in Indian terms is very coarse to define. Indian laws are “strict” as far as the western counterparts are concerned and what passes through the censor’s scissors is defended in terms of artistic freedom. It’s futile to comment on the various crop of heriones who serve as a fodder for casting couches but this association of money and glamour has been significant. Anil Ambani is trying to marry the two different worlds of films and telecom; hoping that it would click. He bought a chain of theatres to justify his expansion in US and hoping to fructify his couple of millions in Hollywood.

All in all his efforts to bring forth the broadband revolution have come to a naught. Long time back, I could starry eyed kids jamming on the country wide LAN and getting to play the first person shooter games. It was an idea that was well ahead of it’s time and it’s been ages literally that I have visited a Reliance Web World myself. Have they been given a decent burial? I have no clue. But Anil Ambani is very keen to scale up his investments in portals like Zapak. Not only it has a weird sounding name, it has full scale coding errors. Big Flix suffers from patchy server connectivity and it’s easier to log on to You Tube and watch a movie than suffer endlessly on Big Flix and expecting it to load up.

Movie rentals are yet untested success formula and I’d be happy to visit the neighbourhood shop owner who gives me a better service than a nameless dude giving me a DVD. If Anil Ambani really wants to make it big, he should explore the Broadband route and serve the movies from a decentralised server; single server costs would skyrocket once the service catches on. He should ensure minimum downtime and always on connectivity in excess of 5 Mbps. This is a tall order indeed and needs huge investments. Although, the returns would be manifold.

He is on the cusp of launching his DTH platform (one of his significant investments) called as BIG TV and hopes to catch up with the existing players. I don’t endorse his investments as yet; atleast not in the TV and Media (BIG FM for radio).

Can you see a pattern? He’s aiming for a cyber presence and across the cross spectrum of media. As and when private FM channels are allowed to transmit news (which would be a sad day indeed), BIG FM, BIG TV, BIG Flix et al would be at the forefront with perhaps “BIG Paper”‘ too.

If you click on the links to You Tube, you’d find his reason to marry the actress too. Sadly, she doesnt inspire him much for broadband though.

Bharti Airtel:Courting MTN?

Bharti first denied and then offered $20 billion dollars for this company in South Africa. They have these laws which mandate than 20% of the marked up capital of a company (or shareholding pattern) should remain with Blacks. if Bharti manages to win this bid (and fatten the purses of the majority of the shareholders), it would be sixth largest combine in the whole world.

This would give it significant leverage for Network equipment and of course, access to global capital and lobby circuits. This should be good news, although I remain circumspect of its real intentions. I shouldn’t be surprised to know (or for that matter anyone) that we don’t know the exact state of Bharti’s profitability. They don’t declare their assets publicly (as far as I know) although, I have read news about their claims to profits. As they grow in size, they tend to acquire more monopolistic and bureaucratic attitudes and can easily ignore the growing customer user base.

Such a monolithic cannot be taken to task unless the Government steps in to protect the customer’s interests.

For the same reason, I have been opposing the mergers and acquistions; more players in the market doesn’t mean more choices for the customers. They would be scaling up infrastructure from ground up and cashing out to the existing companies; although the ones which have been granted licences recently, would be happy to comply rather than compete with stiff entry barriers. The existing players benefit from the incumbents spectrum. Although, there have been laws designated to avoid this; law is an ass and lawmakers are assholes hand in glove with them.

Hence, Bhart courting MTN is nothing new given the scale of money that it could find from it’s parent (Singtel); I have a strong reason to feel that Bharti is merely acting as a front for more sinister evil gameplans.

The great reservation debate

This is one of the “rare” political posts. It has taken a lot of effort to type this one out. A testimony to the fact that I am not having my heart in writing anymore. Although, I can try and make some efforts.

The absurdity of the Indian Justice System knows no bounds. The recent judgment of Hon’ble Supreme Court of India has left every right thinking individual shell shocked. None of the political outfits or the parties, whether aligned to left or right is going to come out in favor of the people who are affected the most.

Historically, affirmative action has not worked wherever it has been sought to be introduced. Society cannot move on idealism; it needs practical approach towards issues that face us. Affirmative action, by and large leads to policy of reverse discrimination, where the system rewards the “less competent” over the more competent person. This definition, unfortunately, remains subjective leading to acrimonious debates, most of them featured on these columns or elsewhere. Merit is indeed an abstract notion; there are no objective criteria to measure it. This remains one of the forceful arguments for those who propose reservations.

In the garb of promotion of equality, the Government has chosen to promote “race equality”. Why should the successive generations suffer on account of perceived injustices to the present “class” of people? It only serves to hurt the “mainstream” people for something that they do not condone or support.

Higher education is a holy cow. Successive governments, regardless of ideologies, have chosen to dabble with their brand of ideology and influence the course of historians to suit it to their own partisan interests. Those knowledgeable in the statecraft would attribute this to ruling of the masses by an iron sleight of hand. It pervades every nook and corner of our existence. The concept of democracy is notional. Every aspect of our lives is measured, filtered and assessed via a fine tooth comb and information for us to be assimilated is rehashed. It justifies this as the majority of the population is unable to take decisions on their own. This, my country, is a nation of dimwits who are unable to stand out and vote for a meaningful change.

If the Constitution guarantees equal rights, this decision should not be equated by taking my rights to satisfy someone else. Since, it would repress someone who is capable for a particular job; it would make this nation a laggard.

Why higher education alone? Why not the entire political spectrum? We have a resounding silence there. There has been no word in reserving the seats for the ones who have been dispossessed in the political arena. The entire political spectrum is dominated by upper castes unless you wish to include the “born again Christians”, the emasculated Prime Minister and his consort very appropriately called as, “The Madam”.

The arguments for the affirmative action have included the fact that a more diversified representation from the various ethnic minorities would lead to a “vibrant workforce” and that it indicates the “strength of democracy”. Most of these concepts have been brought into focus from the discarded “western notions” about democracy in general. We cannot separate the chaff from the grain and ironically may well echo what the British had commented long time back about our inability to govern ourselves. Unfortunately, the overriding message to the future generation is that this nation does not value your academic achievements or the number of hours you put in to burn the proverbial midnight oil. The sole factor is the “accidental birth” in an upper caste household and one is doomed forever.
One of the sore example is that of Tamil Nadu where the reservations work to the disadvantage of “upper castes”. The crushing reservation has only helped to move them out of their communities to search for greener pastures elsewhere. Primarily, the “lower castes” vote en bloc leading to generation of a “vote bank” because in lieu of their votes, the systematic rot is allowed to be in place further depressing any hope of an institutional change.

Another factor is that caste notions are constantly hammered in the consciousness of those who otherwise would not have thought about the same. I cannot but help thinking about the person who would enter the hallowed portals of AIIMS based on his caste rather than clearing the tough entrance exam which tests the potential of above average students. It could hold true for any other institute. All his life, the person getting entry based on Government largesse would be marked and force him to get ghettoized with his “caste kinsmen” without really getting himself integrated in the mainstream as hoped for. These caste divisions would only serve to create constant frictions between the various groups; all the while allowing the powers that be to fish in troubled waters. Such constant friction only negates the idealism which isn’t warranted in the first place.

Although, the judgment speaks of keeping out the creamy layer from the purview of reservation, only the very naïve would believe that this creamy layer would not act to keep their interests in the family. A huge amount of tax is being funneled to pay for fancy schemes which remain good on paper; pathetic in implementation at the ground level. It would be difficult to extrapolate individual cases on generalized scenario but even the creamy layer among the backward castes is reaping a rich harvest of Government largesse. We may never be able to force the system to change and the situation is going to worsen over the period of time. It has been prompted by evil machinations of an old dying crock who cannot muster enough votes for himself in a local municipal election and unfortunately, has been thrust in mainstream for his controversial proposals.

When it would concern the people who vote for a radical change, it remains to be seen as to how their wards or significant others secure or latch on to national resources like leeches. They suck the intellectual discourse dry and for some reason have inexhaustible resources to argue needlessly without any reason. They form the majority of the media and the leftist cabal.

I only foresee a rough time ahead for the aspirants to higher education. Those who can afford, even in these times of killing inflation, would escape this system to institutes where merit alone is the criterion.

There are no easy solutions to these problems. Although, the easiest is not make the waters too murky by setting up caste based reservations. We already have enough troubles on our hands. This is a killing blow to the bright and deserving children from either side of the divide where they are thrust into unknown future. Neither there are any quick fix solutions to problems that have stemmed from very shaky foundations.