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Tuesday, December 11, 2018
Telecom department eyes reverse auction to meet fiscal needs

Telecom department eyes reverse auction to meet fiscal needsThe Department of Telecommunications (DoT) is considering a reverse auction model to ensure that the government is able to raise timely money from sale of bandwidth for meeting fiscal needs without further adding to the financial stress of mobile phone operators. “The industry is divided; some operators want airwaves at current price, rest want it either at a reduced price or don’t want an auction right now,” a senior DoT official told ET.

“Under the reverse auction model, one could put up all bands for auctions. The bandwidth which doesn’t elicit any response will automatically see a cut, say of 10% in the reserve price. This can once again be repeated till we hit a floor cap, say of 25% below the reserve price, after which we pull the particular bandwidth out of the auction and continue to sell the rest,” the official added.

As reported earlier by ET, new entrant Reliance Jio Infocomm has backed an auction of both 4G and 5G airwaves in the current fiscal year at the prices recommended by the sector regulator, Telecom Regulatory Authority of India. Second largest telco Bharti AirtelNSE -1.46 %, however, is keen on a sale of only 4G airwaves in the current fiscal year and has sought a reduction in the price of sub 1GH bands.

Market leader Vodafone Idea doesn’t want auctions till 2020. Its chairman, Kumar Mangalam Birla, has recently told top finance and telecom ministry officials that the severe liquidity crunch it was facing may force the telco to default on a Rs 900 crore spectrum-related charge it must pay the government in March.

This has nudged the government to consider some relief measures for the sector at large, with telecom and finance ministry officials having discussed Birla’s proposals that the period of payment for spectrum purchases be increased to 18 years from the current 16, extending the two-year moratorium to three, besides spreading the payment of Vodafone Idea’s Rs 900 crore into 12 instalments.

Birla also flagged high levies in the telecom sector — nearly a third of a telco’s revenue goes to the government in the form of different levies — and the recent hike in import duty of telecom equipment apart from the Rs 30,000 crore that is locked up on account of GST payment under the 'reverse charge mechanism'.

“The way out of such a problem is to not only ease the stress on the sector but to also ensure it grows which will help to revive the sector faster. Thus, the auctions must be designed keeping these points in mind,” the senior official said. Further, DoT feels that auctions should be made an annual event, with the government putting up for sale whatever bandwidth it has.

“See, all players want different things, we want to ensure that we sell bandwidth on time and of course at prices which are not exorbitant for the sector, and that is why we are now considering the reverse auction model,” the official said, adding that the petroleum ministry is currently following the model.

“This way, we don’t lose value of the precious spectrum lying with us and whosoever wishes to buy or needs more bandwidth can buy. If any bandwidth fails to generate demand after it hits the floor price also, then we put it up for auction next year,” the official added. (Source: Economic Times)


Indians pay more for Netflix than Japanese, Canadians but get less number of movies

Indians pay more for Netflix than Japanese, Canadians but get less number of moviesIn a list of top 10 cheapest countries to watch Netflix, India is at the last spot. Netflix India subscription plan, which begins at a monthly price of Rs 500, is however cheaper than the US and UK but is expensive than Japan and Canada. Netflix India’s library of movies and shows is also not as extensive, according to a report.

Although lower than major markets like the US, UK and European countries, video streaming platform Netflix is priced higher in India than 9 other countries, including Japan and Canada. According to a research report by Comparitech.com, Netflix’s India monthly subscription plan, which begins from Rs 500, is the 10th cheapest among a list of 24 countries.

A country-by-country comparison of Netflix subscription plans shows that the cheapest place to watch Netflix is Turkey. At a monthly cost of just $3.27, it is almost 60% cheaper than the US and UK. Turkey is followed by Argentina, Brazil, Japan, Mexico, Colombia and Canada. “In fact, on a cost-per-month basis, the US and UK don’t fare too well, with the US ranking as the 26th cheapest place and the UK as the 25th. This is probably due to Netflix using the US, UK, Canada et. all to subsidize its growth elsewhere,” the report said.

The size of the Netflix library also varies from country to country. Due to its extensive library of anime, Japan has the largest number of movies and shows — about 6,000.

India, on the other hand, gets about 5,000 Netflix titles, out of which about 3,500 are movies.
The subscription plan of Netflix, which has already made a profit of Rs 20 lakh in its second year of India operations, has been debated as two of its closest competitors — Amazon Prime Video and Hotstar — have much cheaper plans costing Rs 999 per year.

The world’s No.1 OTT platform, which has announced that it has no plans to lower subscription rates in India, is however going to test mobile-only plan in some countries like Malaysia. If the mobile-only subscription plan works out in India, then the entry-level subscription plan may automatically become cheaper. The existing basic plan for Netflix, priced at Rs 500 per month, allows a subscriber to watch movies and shows on laptop, phone, tablet and even TV.

Netflix India has 5 web series and a feature film scheduled soon for release. The web series comprises sports drama Selection Day co-produced by actor Anil Kapoor arriving in December; feminist drama Leila directed by Deepa Mehta, adaptations of books Midnight’s Children and Bard of Blood—the latter stars Emraan Hashmi and is co-produced by Shah Rukh Khan—and Baahubali:Before the Beginning, a spin-off of the iconic film franchise. A feature film called Rajma Chawal directed by Leena Yadav will also stream soon. (Source:Mint)

After China, Actis planning to set up data centres in India

After China, Actis planning to set up data centres in IndiaActis is building the world’s largest non-governmental data centre outside Beijing and is eyeing similar opportunity in India amid implementation of RBI norms on data localization. Private equity firm Actis LLP is in talks with global information technology companies and retailers to set up data centres in India, said a senior company executive. Actis is building the world’s largest non-governmental data centre outside Beijing and is eyeing similar opportunity in India after implementation of RBI norms on data localization.

“The opportunity for real estate in Asia is fantastic. And if you look at here in India, as I said, both in the residential space and the office space with you know the top partners as the Tatas, Shapoorjis and Mahindras, what you can think about (is) data centres,” said Torbjorn Caesar, Actis senior partner.

Data localization refers to storing data on any device that is physically present within the borders of a country where the data is generated. Free flow of digital data, especially which can impact government operations, is restricted by some governments. Many try to protect and promote security across borders and, thus, encourage data localization.

Caesar, who chairs Actis’ executive committee, said data generated in India needs to be stored locally to comply with government rules, which means all cloud-based services will need a local data centre.

The data centre business will be handled by Standard Chartered Bank’s Principal Finance Real Estate business in Asia that Actis acquired recently and which has invested in China, India and South Korea.

“It will be under the real estate arm,” Caesar said in an interview to Mint last month.

RBI has asked payment firms to submit fortnightly updates on the progress made on storing data locally. A 6 April RBI circular said: “All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. This data should include the full end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction.” It added that for the overseas leg of a transaction, the data may be stored in the foreign country. Global digital payment firms such as Visa, American Express, Facebook, PayPal, Mastercard and Google are likely to be impacted by the Indian regulations.

Caesar said Actis is in talks with all big global IT firms but added that “we don’t want to mention some names as we are still in negotiations.” Actis, which invests solely in emerging markets, has committed $2.1 billion for India and has been operating in energy, financial services and real estate space. Of this, $950 million has been committed in the last 18 months.

The company has had a good run in India’s clean energy space. In the largest domestic clean energy deal, Actis sold in April this year Ostro Energy Pvt. Ltd to ReNew Power Ventures in at an enterprise value of $1.5 billion. Ostro Energy and Solenergi are among the energy platforms that Actis has created globally, following Globeleq Meso America in Central America, Zuma Energia in Mexico, Aela Energia in Chile and Atlantic Renovaveis in Brazil.

Caesar also spoke about the competitive advantage that the 500 board level, C suite personnel it has across its businesses that offers unique insight and competence to be leveraged across its portfolio.

“The bargaining power we have from the procurement point of view is strong,” he added.

Actis has $10 billion of projects under construction in growth markets and employs 116,500 employees in the businesses that it controls.(Source:Mint)

Jio tops chart in terms of AGR in September quarter: TRAI data

Jio tops chart in terms of AGR in September quarter: TRAI data Reliance Jio has emerged as the top telecom service provider in terms of adjusted gross revenue (AGR) — earnings from mobile phone services —at ₹8,271 crore for the July-September quarter, according to TRAI data. The Telecom Regulatory Authority of India’s (TRAI) latest data showed that newly-merged Vodafone Idea is second on the list with AGR market share of ₹7,528 crore, followed by Bharti Airtel at the third position with an AGR market share of ₹6,720 crore for the said quarter.

The government’s revenue share of licence and other fees is determined on the basis of the AGR from access services.

BSNL revenue market share stood at ₹1,284.12 crore in July-September. In the previous April-June 2018 quarter, Jio led the chart on standalone basis with ₹7,125.7 crore AGR. However, the combined AGR of Vodafone and Idea, which were in the process of merger, was more than that of Reliance Jio at ₹8,226.79 crore.

Separately, Vodafone’s AGR was ₹4,483.69 crore and that of Idea was 3,743.1 crore.

Bharti Airtel’s adjusted gross revenue was ₹6,723.5 crore.

Gross Revenue
In terms of gross revenue, Vodafone Idea led the chart with ₹13,542 crore. Airtel followed with ₹11,596 crore and Jio was at third position with GR of 10,738 crore. According to TRAI, Jio led the AGR market share in 11 out of 22 telecom circles, Airtel in six and Vodafone Idea in five. (Source: The Hindu BusinessLine)

Broadband subscriber base at 463.6 million in August 2018: Department of Telecom

Broadband subscriber base at 463.6 million in August 2018: Department of Telecom According to data released by the DoT on its website, the total number of telephones rose to 1,189.17 million, up 9.73 million over the previous month. Amid explosive growth in data consumption, India’s broadband subscriber numbers touched 463.6 million at the end of August 2018, up 0.74 per over the previous month, according to official data by the Department of Telecom (DoT).

The number of broadband subscribers stood at 460.24 million in July this year.

According to data released by the DoT on its website, the total number of telephones rose to 1,189.17 million, up 9.73 million over the previous month. Of this, wireline phone connections remained almost flat, while the wireless connections climbed 0.84 per cent month-on-month to almost 1,167 million. “Maximum rise in total telephone connections was recorded in Mumbai (19,35,854) followed by Bihar (10,26,007) and Madhya Pradesh (9,61,251). However, Jammu & Kashmir recorded a fall in telephone connections over previous month, with a decrease of 1,72,445,” it said. The share of wireless segment in total connections stood at 98.13 per cent by the August-end, and wireline telephones at 1.87 per cent.

As on August 2018, the share of public sector companies in total telephone connections was pegged at 11.12 per cent, with private sector accounting for 88.88 per cent share. Further, area-wise telecom services analysis revealed that that Uttar Pradesh (East) has the highest share in the total telephones (8.62 per cent) followed by Maharashtra (8.12 per cent), Andhra Pradesh (7.40 per cent), Bihar (7.38 per cent) and Tamil Nadu (7.05 per cent), it pointed out.

These five service areas taken together have a share of 38.57 per cent in the total telephone connections in India. (Source: The Indian Express)

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