Broadband plans to beat recession

Broadband has lot of expectations loaded on it. During the talks of the slowing down of the economy in many of the worlds's nations, one theme is persistent - spending on infrastructure to create advance broadband networks to beat the downturn.

In the U.S., it it well known what Barack Obama thinks about broadband. Wireless broadband has consistently found a place of primacy in Obama's plans to revive the nation's fortunes. The idea is good to make wireless broadband as free and available as tap water and Obama's is keen to spend upwards of $6 billion to achieve this target. Broadband would be consistent theme running through Obama's presidency and I guess he will be one President who is going to be celebrated because of his technological vision.

In the UK there is talk that worldclass broadband is required for the economy to find its feet and get running again. Internet is seen to be the more important business tool around which a lot of disposable income will flow. The nation's plan machines are working feverishly to push for better broadband infrastructure to make it good enough for a lot of business transactions.

Now, what does this mean to India as one of the hubs of knowledge economy? Better broadband would translate to better offshoring and cheaper infrastructure costs and in turn better reach of services. India has to realize that the grand broadband plans laid out by countries is to be prepared for the revival of the economy. Free or cheap broadband can do wonders for India in education,  rural markets, relief activities and development at a grassroot level and also boost the retail segment at the topline. I remember reports about a national plan to provide free or cheap broadband on a very ambitious scale ( ET Link ) by *2009* - that day has come now and it would be better if the start is made even now to make good the promise of connectivity. Amid an earning streak by the telecom industry, there is no better time than now to get go on the grand plans for broadband.

Image Courtesy: www.nityin.com

Cheap(er) SMS - Why we need it

Cheap SMS is a possible thing for telcos. I mean cheaper SMS than the current rates. Current rates of national SMS are at Rs.1 per SMS. Considering that there are 160 characters in an SMS this works out to 7490 SMS per 1 MB. At Rs.1 per SMS this would be Rs.7490 per MB of SMS. At Rs.0.5 per SMS this would be Rs.3745 per MB of SMS.

160	characters per SMS
140	bytes per SMS
7490	SMS per 1 MB
7490	Rs. for 1 MB of SMS at Rs.1 per SMS
3745	Rs. for 1 MB of SMS at Rs.0.5 per SMS

Now compare this with voice calls.

13.2	kbps for a voice call
33	bytes per frame of 20ms
1650	bytes per 1 sec of voice call
99000	bytes per 1 minute of national long distance call
10.6	national long distance calls per 1 MB
10.6	Rs. per 1 MB of national long distance calls at Rs.1 per call

The price of SMS is found to be 350 to 700 times costlier than voice calls. Why this is so? If we go back in memory, mobile calls were also ruling very high. There were times when an outgoing call costed Rs.16 and an incoming call Rs.8. Across the markets this was the general trend when telecom watchdog bodies brought about directives and enabled legislation to reduce the tariffs of mobile calls. For doing this the watchdog bodies called mobile telephony a "basic service" and asked the governments to reduce their various charges towards the basic service and also pressured the telcos to reduce their tariff. SMS, as opposed the basic service of mobile telephony, is called a "value added service" (VAS) and the efforts of the watchdog bodies were not so strong for value added services. Though SMS prices have come down, they have not matched the voice service and we continue to pay very high prices for small pieces of the bandwidth offered by SMS.

Why cannot SMS prices be lower? The keyword here is value added services. If SMS can be reclassified as a basic service, telcos would be forced to reduce the SMS tariffs inline with voice services. SMS can well be classified as a basic service as users have started to use the service for basic needs like finding the best prices for their produce to getting storm warnings. There can also be texting providers similar to long distance providers to open up the market. You can already purchase bulk SMS from a variety of sources. However, a service like SMS should also have eat-as-much-as-you-can flat rate tariffs like web tariffs. This would be the ideal situation for the market.

In the cusp of 2G and 3G services now, it is time we had better SMS at cheaper rates. With 3G there will be many opportunities for pursuing new value added services. SMS can be kept basic.

Qualcomm targets WiMax with 3G technology for laptops

In its strategy to counter WiMax, Qualcomm has announced [InformationWeek] a 3G chipset that provides connectivity to laptops on UMTS HSPA and CDMA2000 EV-DO networks worldwide. Along with 3G connectivity the Gobi chipset also has support for GPS.

Qualcomm claims it is enough that laptops are equipped with the Gobi chipset for 3G connectivity clearly taking a potshot at Intel-backed WiMax.

Qualcomm has the support of laptop maker HP and telcos Vodafone and Verizon Wireless all of whom have come out with statements welcoming the Gobi chipset.

For the telcos the chipset is an exciting prospect with possibilities of tying in the laptops with data plans a la mobile phones. However it has to be seen as to how the chipset will be bundled -with both the HSPA and EV-DO options together or if the users will have to choose one of them.

Intel would have an edge in persuading laptop vendors to bundle WiMax chipsets and Qualcomm would have to forge more deals with laptop vendors to take its Gobi chipset forward.

3G is just happening and if telcos roll out more of UMTS HSPA and EV-DO networks then it is good news for companies like Qualcomm and Ericsson. On the other hand if it were WiMax networks that get rolled out the most by telcos then Intel and Nortel would benefit the most.

Spectrum Wars in India

Okay this story continues on the last one. Spectrum... In a story attributed to IE I read about the big problem at hand for the regulators in India on allocating spectrum to the existing and new licensees.

The players like - Bharti Airtel, Vodafone and Reliance have among themselves earmarked $8billion worth of plans for expansion and this is not going to happen without addtional spectrum.

On the other hand there are new players who are awaiting their licenses and in turn their spectrum allocations - AT&T/Mahindra (see previous post), Verizon/Videocon are some. The regulators would like the new players to come in as it is bound to be beneficial to the consumer with better services and better tariffs - but can they ignore the existing players and their long pending requests for addtional spectrum ?

Well the spectrum allocation issue is bound to get very contentious and the authorities should given premium to greater transparency and do a fine balancing act with respect to existing players and new licensees. The government has said that it will announce new terms and condtions for the sector within a week. If there is going to be no change in the first-come-first-serve policy of spectrum allocation followed by the government, then the existing players who have long pending applications would walk away with the spectrum and the new entrants would have to wait for 3G spectrum auction whenever that happens. However in an ET report , CCI has approached the authorities to moot an auction mechanism which by which the available spectrum can find a market determined price. It is not known if this proposal cuts favor with the government.

In the ensuing scenario, new players may find that they will have to defer their expansion plans for want of spectrum. They may have to wait as the existing players did for their expansion plans. If the spectrum allocation has to be so finely balanced then entry of more than one new player would be a doubtful at least in the present scenario. Of course there is the M&A route too.

India is the place to be for wireless operators

I read a story in CNNMoney about AT&T applying for wireless licenses covering all of India in association with its local partner Mahindra Telecom. Now this is an interesting move considering the recent developments - Vodafone has come in a big way with by winning its bid for Hutch and making announcements it is going to splurge $2billion to carve up the market. The largest player in the market Airtel at present is doing just well with 43 million subscribers. With less than 20% of 1.12 billion people using mobile phones and usage steadily catching up big players are taking a fancy to the Indian market. This seems to be the best growth scenario among all emerging economies.



The CNN story goes on to emphasize that after getting the license and spectrum AT&T would have to contend with the stiff competition to make a dent. Though early it has to be seen how AT&T plans to rapidly expand its network infrastructure. On its business model, I think AT&T would have attractive corporate plans and a killer smartphone (*) for the consumers. Let us see...

Samsung Intros GPS Phone

Samsung has introduced its first GPS equipped phone with the launch of i550. Running on Symbian S60 platform, it marks the debut of the OS on Samsung phones along with the i400, i450 and the higher-end i560. The phone features a Blackberry-like trackball, has 150 MB flash memory, triband GSM, 3.2 MP camera and HSDPA. The featureset compares well with N95 and can be expected to give a boost to Samsung during the Christmas season.