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

RIM bullish on India market

RIM has announced plans for selling *unlocked* BlackBerrys in India [ET ]. Redington has been drafted to play the local distribution support to work in tandem with telcos to push the niche smartphones to the *consumer* market. In the last post I highlighted the trend of smartphone sales picking up in India. BlackBerry has drafted a strategy specifically targeting the Indian market involving development of localized consumer-centric mobile applications and even considers launching an India-specific smartphone targeted at the consumer market. BlackBerry has had a good market in India in the enterprise segment with virtually every company rolling rolling out their push-email services on BlackBerry.

Around the same time comes the news of Motorola closing down its sales office in India [ET ]. Notwithstanding Motorola's recent troubles, this tells a tale of the changing market. The lower end of the market entices with volume, but the burgeoning vendors in this segment make it very unattractive in terms of margins. After a lull, the grey market is flourishing with lot of cheap handsets from China and elsewhere and they are taking the game out of the major vendors. Now the space in the higher end smartphone market is getting expanded and vendors should take cues from the policy makers and market to reap the dividends from momentous things such as 3G rollout.

New trends [ET ] in mobile phone usage points to a marked increase in the sales of smartphones in India as compared to other mobile phones. This is a significant statistic because of two reasons. One, there are vendors who focus on non-smartphones for the Indian market and they can take some pointers from this trend. Two, the smartphones are priced at a very high premium by some vendors who can now think of volumes and make their offerings more affordable.

The mobile phone has become the most integrated gadget to people after the watch and its going to stay that way. And like watches people would start to want their smartphones to be the smartest of the lot. Simple swiss army knife-kind of smartphones with a list of features and having elegant form like those of Swiss watches would soon dominate the market. This has been exemplified the success of smartphones like BlackBerry which has really taken of well in India.

Smartphones' rise into the public imagination is great exemplified by Barack Obama's images of using his gadget. Obama's choice of smartphone also tells a lot about the trend. Have a look...

    Image Courtesy : SlipperyBrick.com

Make it more - the 3G pie

     Image Courtesy : gadgets.fosfor.se

The new directions coming from the government is the idea of making the 3G license bidding regions called circles from existing 5 to 8. This is in line with the governments intention of making the most of revenue out of the 3G spectrum auction. A larger number of circles would make the amount for each region cheaper but would increase the total kitty. This would also allow smaller players to bid where it was difficult for them to foot the amount for a larger circle earlier. This move will be seen as a small bit done by the government for local players. As we can see the large players would like to have a bigger subscriber base in a bigger circle and would be ready to pay for it.

It has to be seen if the technical persons can give a go ahead about the new circle plan after looking at the feasibility of allocating spectrum in 8 new circles. There might be other objections for the new scheme from other stakeholders like telcos, other ministries, regulators and other policy bodies before a decision is visible. Auction might be possible in the near term only in Feb 09. In the meanwhile the telcos can strategize and restrategize for their best deals. 3G spectrum auction is moving at a slow and steady pace and we will have to see if all the players - the government, the telcos, the vendors and the content providers can cook up an exciting fare in time for the party.

3G rollout India - so near yet so far

Last year saw many false starts on the 3G spectrum auction in India. Of all the frenzied activity witnessed on the 3G front MTNL's rollout of services in the NCR region was the only news to show off and larger subscriber population is yet to see any so much as a date on when 3G services will be available. The government wants to make sure that it wants the spectrum auctions to fetch the highest possible price ( called market price ) in the circumstances of economic situation worldwide. However with every successive delay of the auctions the bidders are getting wary and at best show lukewarm interest as in case of the response to the pre-bid meeting.

Related consequences to the delay in the 3G spectrum auctions are the delay in WiMax auctions and even the MNP developments. The latter also involves an auction process and right now all the delays are being attributed to the policy changes initiated by various stake holders within the cabinet. The government does not have any problem in the delays as the large delays would give time for the mobile subscriber base to build which in the Indian case has been happening at a rapid clip. As time goes, the government will have a better fruit to offer in terms of a larger subscriber base and can expect a higher price. As said before, the bidders are also not very keen at this point of time to hurry up.

All said, the date for the 3G spectrum auction is still 30th January 2009. If something happens by then the auction process goes through, it will be a big surprise as the news that is available points to more delays.

China - 3G approved '09

China goes into 2009 with approval of 3G licences [link ]. China's homegrown 3G platform called TD-SCDMA will be used and advanced in a quest to give primacy and advantage to home industries. Vendors craving for the huge market of the middle kingdom would put in place plans to ramp up on this technology. This is called changing the rules of the game. With growing clout in terms of technological ability and economical prowess, China is positioning itself to reap maximum benefits out of  all major opportunities. Telecom is one area where China has focussed its energies to ramp up and it is not surprising that Chinese companies have become credible competitors to the telecom biggies like Ericsson, Alcatel-Lucent et al.

Wishing all a very happy new year 2009 !!

Hot Mobiles, Hotter apps

This post come after a self-imposed gap for the busy things that happen. One of the momentous thing that happened during this time was the approval given to white space spectrum by FCC. There is bound to be lot more arguments before any thing comes out of white space spectrum debate, like lot of cheap bandwidth. FCC has taken a go-forward decision to let technology find solution to the debate.

Meanwhile an application like Skyfire points to a future where the mobile needs more power for a seamless experience of PC-like browsing. Mobile browsers have vied with each other to show how better they can reformat the page to suit the mobile's screen. Skyfire takes the approach of replicating the experience found in PCs on the mobile. Rich applications like the flash player only available of PCs are now extended to mobiles thanks to Skyfire's technology.

On browsing using Skyfire on my N95 (with the latest firmware having demand paging support), it takes quite an amount of the CPU for getting to display the Skyfire's capabilities, however I can actually watch embedded video relatively easily. With a bit more power, the page refreshes can be faster. The newer phones might do well using Skyfire than my (g)old N95 and that is where the direction is for future mobiles. Hotter, faster processors for mobiles...new cooling technologies....advances in battery life most notably energy density, also advances in battery temperature control...

As far as the applications on the mobile itself go, the trend is towards more immersive browsing experience, more video options, innovative interfaces ( touch of iPhone, trackball of Blackberry ...come to mind) . A workable speech interface might also come, haptics for sensory feedback, projection of screen, improved TV interface may follow and may be some nice apps for mobile webserver...and one more - live streaming (Qik, Qik, Qik...  ) I hear somebody also say about editing documents, push email, the office works... Everybody needs more computing power in their hands in a literal sense.

My best wishes for mobile computing...Cheers!

In the news: Bharti Airtel to setup telecom innovation fund

Bharti Airtel, India's leading telco has announced of the setting up of a telecom innovation fund worth Rs.200 crores to seed telecom startups. This is a smart move by the telco viewed with the new telecom developments - 3G rollout, coming of MVNOs and entry of foreign telcos. Bharti Airtel can leverage its licenses, infrastructure assets and pan-India coverage to provide a good platform for telecom startups in turn augmenting its own revenues both organically and inorganically. This first ever telecom innovation fund would be watched closely and its success can spawn other such funds too.

What are the factors that has given this positive spin to telecom entrepreneurship? Here are at least two. Apple with its 3G iphone has left some interesting functinality out and its Appmart platform has encouraged a new industry around it. Nokia's takeover of Symbian has made the OS opensource in effect driving lots of app contenders to develop software and content for its platform. Google though late with its Android platform would not be far behind with its release and would also interest independent software developers to develop for the platform. Telecom startups can make use of such information to target their share of user's wallet

Indian 3G spectrum auction process begins Monday

     Image Courtesy : bioteams.com

The process of allocating 3G spectrum to telcos is to kickstart on Monday with the pre-bid conference to select the overseer of the e-auctions for the 3G spectrum for both GSM and CDMA services. 3G spectrum winners will be known by early October. The auctions are expected to raise U.S.$ 10 billion or more of revenue for the government which would make the telecom department one the the biggest profit centers for the government.

Now what is to be seen keenly is how the telcos - both domestic and foreign take to the e-auction. There have been misgivings about competing in the 2G space from foreign bidders. The DOT had changed the rules so that foreign telcos could merge or buy stake in local players on entering the Indian market and this ought to assuage their feelings.

One more aspect to be watched is the final cost of the 3G spectrum and its effect on the 3G rollout. A high floor price would push the final prices so high that bidders would use up their revenue on the licenses and would have to wait for deploying the network infrastructure - the next step for telcos. This has happened in EU markets most notably in UK. In spite of the delay in launch of 3G services, 3G penetration had picked up fairly well. In the Indian scenario such a thing though wished by telcos might not be so easy. This would need very competitive end-user tariffs and very impressive differentiated services. This would call for huge spends upfront before a good monetization trend sets in. Setting an optimum floor price would hence be the challenge for the telecom ministry.

The challenge for TRAI would be to oversee proper timely rollout of 3G services in all circles with undue delays by the telcos. TRAI would also have to keenly look at how and what kind of recommendations are to made on the MVNO policy. This would also be critical as many foreign players might prefer to enter the market as MVNOs in order to avoid high license fees. TRAI's recommendations would some day tell on the rate of penetration of 3G services in India.

The challenge for the telcos would be about offereing high quality differentiated services and  make enough money to reinvest in their new new 3G networks. In this respect the telcos would also need to fix attractive tariffs that would work for them too. Another aspect telcos would be focussing on is MVP - mobile number portability - which might necessitate a rethink of telcos' strategies about retaining and growing subscriber bases.

The challenge for the user is to embrace 3G technology without falling for hype and demand high quality services from the telcos by rewarding the best offering and not to look at price alone.

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.