E-Paper
Ringing in the change
The passing year saw liberalisation in the telecom sector scaling new peaks. Five new players entered the field, two existing CDMA players (Reliance and Tata DoCoMo) started GSM-based services, and the public sector operators started 3G services.
The passing year saw liberalisation in the telecom sector scaling new peaks. Five new players entered the field, two existing CDMA players (Reliance and Tata DoCoMo) started GSM-based services, and the public sector operators started 3G services.
The country ends 2009 with more than 10 pan-India service providers. Most countries have 3 or 4 players.
With tariff rates hitting a low at a half-paisa per second, the consumer cannot expect a better deal. But incumbent operators feel liberalisation has become overstretched, and the market is hypercompetitive.
What does 2010 hold in store?
Consumers can expect more liberalisation. Mobile number portability (MNP) is expected to be implemented in the first quarter. Subscribers will no longer have to surrender their number in order to shift to a new operator.
But the wait for 3G services from private operators is likely to continue.
Though the auction of 3G spectrum will take place in the first quarter, the spectrum will become available only by August. “Therefore, private players will be able to launch 3G services only by 2011,” said an official of the department of telecommunications (DoT).
The government-owned Mahanagar Telephone Nigam Ltd (MTNL) and Bharat Sanchar Nigam Ltd (BSNL), which launch 3G in 2009, are aggressively marketing their services.
MTNL is offering video calls at 20 paise per minute — much lower than voice calls offered by any operator.
Tata DoCoMo kicked off a tariff war when launched its GSM services in Chennai, offering per-second billing. Others followed suit. Later Sistema and MTNL offered tariff of half-a-paisa per second. Now, service providers say the tariffs are below cost. “The new operators are offering predatory prices,” said Manoj Kohli, CEO of Bharti Airtel. Existing operators want TRAI to intervene.
New players such as Tata and Uninor deny undercutting. “The tariffs offered by us have been thoroughly thought out and make for perfect business sense,” said Anil Sardana, MD, Tata Tele.
Whatever happens to the tariff, some consolidation is likely. “The market can’t support so many players. A consolidation has to take place,” said B.K. Syngal, principal partner, Dua Consulting.
With tele-density reaching over 100 per cent in urban areas, telcos are now eyeing villages. Data shows that more than 50 per cent of subscribers added by existing operators such as Bharti and BSNL come from rural areas.
The focus of 2010 is expected to be the hinterlands.
