Tag Archives: VSNL

Tata Telecom: Sinking ship

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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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I have been having a very interesting exchange of ideas with Mathew Carley who is the owner of Hayai Broadband. He needs no introduction on the forums and I owe a lot of good deal to him. However, I must defend the user’s perspective and a blog post follows.

He writes:

1. FUP is not illegal, and there is nothing legally wrong with what any ISP is doing when it wants to keep it’s network under control – it is perhaps unethical to advertise a broadband plan as “unlimited” and apply an FUP. I prefer (and use) the term flat-rate, which refers to pricing, not usage.

TRAI, the regulator defines Broadband as “always on with a speed of 256kbps”. They have supported this definition that has been taken from ITU web site. The whole point here, from an end user’s perspective is that the definition has remained static. I think the FCC definition has also remained stuck here. However, the push for “faster speeds” has mainly come from academia and the realization among the telcos that serving content through their dumb pipes can be very lucrative, net neutrality be damned.

All the more they ALSO realize that it pays in the long run to get the customers hooked on to “speeds” AND “content” and then make money out of “traffic shaping” and the works.

Yet, if you look at the pdf from ITU (opens up a link in your pdf viewer), do check out the page 19 (under pricing) where it clearly states the success of South Korea broadband has been because of “flat rate”.

Here BSNL (others and your probably included) have different tiers with a “limit”. Now this limit can be argued. As I had mentioned that majority of your users would be content with social networking / email you would hardly see the “abuse” of network. However, BSNL is a public service. Which means that the network effectively belongs to public and for arguments sake has no say in the way it overlords it. Thats my opinion.

You would be owning the fiber and its for you to come out with what ever plan/ideas you wish to.

As far as TRAI is concerned, it does NOT mention the word “fair usage policy” which is again in contravention to license terms (as all the ISP’s are regulated by TRAI/DoT) and hence ILLEGAL. So you are right too except that it sugar coats the bitter pill.

2)

Many sites – even many India-centric sites, are hosted abroad. This is where the “strain on the networks” usually comes in.

Yes, I know it. Koreans have much of it hosted inside the country because they are not too comfortable with English. Duh. We are among the largest speaking country in the world by the way; still it is not a huge net market.

3) BSNL only has an International cable between India and Sri Lanka – it doesn’t have any going anywhere else. It buys almost all of it’s bandwidth from VSNL – 65% from VSNL/Tata India, 14% from GlobeInternet (a subsidiary of Tata in North America), with the rest from a small assortment of other ISPs both domestic and foreign through it’s various arrangements.

Thanks for letting me know this. I am waiting for official confirmation including the break up of prices.

4. We can safely assume that they’re anticipating about 300GB of usage on their FTTH plans, at Rs10/GB. Cheaper than what I can get it for, but they’ll already be getting the volume discounts I’m aiming for.

Network usage varies WILDLY. I cannot nail even an “AVERAGE USE” but well, it can possibly be predicted once the metrics are clear, the amount of traffic flowing in your fiber and the works.

7. If you’re an ADSL customer, 768kbit/s is pretty much all you’ll get out of a DSL line anyway, unless you’re really close to your DSLAM. ADSL2+ is meant to go up to 3.5mbit/s upload speed, but in NZ I’m 300m away from my cabinet on fairly decent quality lines, and I barely hit 900kbit/s. Since the default upload speed they provide I think is 256kbit/s and you purchase more upload in 256kbit/s increments, this probably is to cover their ass so as to prevent people from trying to buy 1 or 2mbit/s upload and then getting about 768k.

Thanks! The wording on the web site sounded as a “limit” without mentioning the technical reason. Let them confess in writing that it it still is ADSL and then I can question them as to why it is taking delay in introducing ADSL 2. I can file as many as RTI’s I want!

@operamaniac Right of way and civil works costs a fortune. I mean that quite literally – about 75-80% of our laying of fiber to homes goes towards these two things: the fiber and equipment to run the network are negligable costs by comparison, and since it can be crores per kilometer, it won’t take many kms of fiber for us to reach 1,000 crores.

The sad fact. It is the job of municipalities to lay down fat ducts throughout and just offer it to the end users. Simple. Far sightedness is not a virtue in this country. It comes at a premium from those who are NOT in this country.

Interestingly here’s something from Wikipedia entry for ‘Internet in Japan’. It says and I quote:

Operators struggle to maintain enough bandwidth to allow maximum usage of the service by customers. Even the largest operators have capacities in the region of tens of gigabits while customers with gigabit FTTH services (or higher) may number in the thousands. This problem is further compounded by limits caused by internal router bandwidth. Estimates of traffic based on data collected in May 2007 by the Ministry of Internal Affairs and Communications set total network usage at approximately 720 Gbit/s combined. The report further states that by May 2008, total traffic will exceed 1 Tbit/s.

Woooo. But then these are 2008-09 figures. Similarly the ITU report that I alluded above is 2003. Much has changed in past 7 years; we are still stuck in the kbps and well….. Time to change the tune, the gears and tracks.

@ Operamaniac a.k.a. my dear web master. 3G is not in my radar right now. In fact, I wanted to ask them as to how they have utilized the USO fund and what is the state of broadband connections in the rural areas. I know for sure that they are spending disproportionately on 3G services and neglecting the land line when it should be reverse. Lets see how they react. At least it would be a basis for seeking legal remedy or anyone who wants to file a Public Interest Litigation.

Cheers!!

Broadband in India: Why no progress

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Is it any surprise that Broadband is not really taking off in this country? Fact of the matter is deep rooted corruption. Here is a break up analysis of how things are rotten in Karnataka (as an example) and assuming that similar “rates” apply at central government. There is no doubt that being in politics is pure money making enterprise. Here are the low down statistics.

While the Tata-Corus deal was over Rs 36,000 crore, they could have acquired the Government of Karnataka for just Rs 2,825 crore by buying 113 MLAs. Another Rs 1,000 crore might have had to be doled out to mid-term dissidents and other contingency expenses. For such investment, the returns from bribes are fabulous. Even Warren Buffet cannot match it.

This is mere change for a major group like Tata’s. Imagine the clout that these companies have at the national level, their ability to influence major policy decisions and ride roughshod over the customer’s interests.

For example, here is a news from the past when Tatas took over VSNL in 2002 during the time when BJP was in power and it was on a disinvestment spree.

The Tatas today took charge of the Videsh Sanchar Nigam Limited (VSNL) after signing shareholders’ agreement with the Union Government for acquisition of 25 per cent stake in the telecom major for Rs. 1,439 crores.

Adjusting for inflation, it would be much more than the figures suggest but I wonder how much “speed money” was given and whether it was the right thing to do. It had acquired it’s long distance telephony which at that time was very lucrative.

The total valuation of Tata Indicom as a brand is expected to be in “billions”. This is not counting it’s lucrative tower business.

The company’s GSM services were launched after NTT DoCoMo picked up 26% in the company. The Japanese telecom major, which prides itself in its third generation (3G) offerings, spent $2.7 billion on its first investment in Tata Teleservices, valuing it at just under $11 billion.

One could argue against such fancy valuations but there is no “benchmark” for such a valuation. Rajesh Jain has interesting take on corruption (1,2,3,4,5).

It’s not that the powers that be are not aware of the prevailing situation on ground. It’s easier to keep it this way because a populace kept “busy with basic issues of life like a proper dwelling, electricity, food and infrastructure” would hardly have any time to think about issues like ‘broadband’. Ask the person on street and the familiar reaction would perhaps be,”WTF”.

Hence many times I think that our pretensions about “knowledge based economy” may all be crap and flotsam. The basic issues lie much deeper and as Atanu Dey rightly points out that the basic impediment to our progress may well be the Indian Government itself. It doesn’t matter to anyone though because as we fucking multiply to billion plus, there is always someone laughing behind our backs making a killing of millions.

To round it up, it is pure money power that allows these companies to roughshod it over us. They know that regulations cannot be enforced, the justice system inordinately slow and right to information act does not apply to private organizations (though I can argue against it). At the same time, not being transparent is the biggest asset available to them.