Convergence Plus
Wednesday, October 18, 2017
RJio is set to overtake Vodafone as second-biggest player in urban India

RJio is set to overtake Vodafone as second-biggest player in urban IndiaWithin just one year of operations, Reliance Jio is set to overtake Vodafone to become the second-biggest operator in terms of subscribers in urban areas. According to an analysis of the data released by the TRAI, Bharti Airtel is still the top operator in urban areas with 140 million users. Vodafone has about 95 million subscribers in urban areas closely followed by RJio at about 90 million. There are 680 million urban subscribers in the country.

“RJio has almost become the second-largest urban telecom operator by subscribers and has similar number of rural subscriber as BSNL,” GV Giri of IIFL stated in a research report.

RJio has also raced to 29 per cent subscriber share in the mobile Internet market as of the first quarter of 2018, with Bharti being the only other telco to have added data subscribers in the past year. According to IIFL, RJio may have by now overtaken Vodafone in the second quarter. The telecom regulator reports the actual numbers with a lag.

“RJio’s urban subscriber base was marginally below Vodafone’s as of June and we estimate RJio to have overtaken Vodafone in the second quarter, considering Vodafone’s subscriber loss,” Giri added.

“Users on RJio network consume more data than the combined usage on AT&T, Verizon and T-Mobile in the US. We clearly did not expect such a response from Indian users when we started out. But this is just the beginning of what we have to do,” says a top company official.

RJio’s entry into the telecom sector has disrupted not just the industry but also consumer behaviour. A 4G subscriber now uses data that is four times that of a 3G subscriber on an average.

“Overall data usage has jumped 9x in the past year, with 4G accounting for more than 80 per cent of total data usage. India has more 4G subs than 3G or 2G data subs,” Giri said.

RJio’s entry has disrupted incumbent operators’ business models with most of them reporting losses since last year. Two of the largest operators, Idea Cellular and Vodafone, have now been forced to attempt a merger to survive.

“The impact on incumbents is short-term. Finally, the entire industry will benefit as data consumption rises,” said the RJio official. (Source: The Hindu Busnessline)

Idea Cellular records highest 4G upload speed in September

Idea Cellular records highest 4G upload speed in SeptemberIdea Cellular today said it achieved the highest 4G upload speed in September citing data compiled by TRAI’s My Speed App. Idea Cellular topped the chart in terms of average 4G upload speed for September at 6.307 mbps, the private telecom player said in a statement reeling off TRAI data. It reported a high average download speed of 8.74 mbps (megabits per second) during the month and has been consistently recording highest upload speed in the last six months, the operator added.
TRAI tabulates data download speed with the help of its MySpeed app.

Idea Cellular has rapidly expanded network to 2.60 lakh sites across the country, with 50 per cent dedicated to mobile broadband services, it said in a statement. The company added nearly 50,000 broadband sites over the last 12 months to August, growing its broadband footprint to cover 5,888 census towns and close to 1.05 lakh villages and reaching out to 45 per cent population of the country, it stated. (Source: The Hindubusiness Line)

Telecom sector critical, needs urgent government help: Experts

Telecom sector critical, needs urgent government help: ExpertsNot just fiscal policy support but a structural one is needed to ease the massive debt burden which is "slowly strangulating" the telecom sector, opined experts. Industry observers stated that at stake is not only the telcos ability to employ manpower and resources for introduction of next-gen communication technology, but severe consequences for lenders and nearly 150,000 jobs. Among the solutions prescribed by experts are setting up of a Telecom Finance Corporation and giving the industry priority sector lending (PSL) status. If PSL status is allowed, then borrowing, overall cash-flow and debt management will become easier for all telecommunications service providers (TSPs), some experts told.

Others believe the government should look at setting up a Telecom Finance Corporation to ensure priority lending and also give the sector a tax holiday as it transitions from voice to data. According to Arpita Pal Agrawal, Partner and Leader, PwC India, the government "can additionally look at declaring the sector as a priority to facilitate the future network expansion requirements of the sector".

"Government could also review the hyper-competitive situation in the sector in light of customer interest in the medium- to long-term which is best served, in a market of this size, with at least three-four operating telcos actively competing on factors such as price, quality, innovation, etc," Agrawal said. Interestingly, nearly half the sector debt is in the form of deferred spectrum liabilities to the Department of Telecommunications (DoT), said Tanu Sharma, Associate Director, India Ratings & Research.

"Rationalisation of spectrum pricing and elongation of DoT debt maturities could be options used by government to ease the stress on the sector." Besides high spectrum and infrastructure costs, the total levy paid out by the telecom sector is about 29 to 32 per cent -- which is one of the highest in the world.

"Incentivise private or public players to invest in broadband infrastructure and allow flexibility of export of redundant active equipment," elaborated Hemant Joshi, Partner, Deloitte Haskins & Sells LLP. He added: "Relax single-borrower exposure limits on banks for credit-worthy telecom companies and allow issuance of tax free bonds."

The TSPs can also balance debt levels through monetising of non-core and tower assets to mitigate the pressure on their credit profiles, Sharma noted. On its part, the government has formed an inter-ministerial group (IMG) to look into the issues faced by the sector.

The IMG has reportedly recommended to the Telecom Commission that the period of deferred spectrum liability payment be increased to 16 years from the current 10 years.

Another recommendation by the IMG is that the telcos may be allowed to pay for the spectrum with interest calculated marginal cost of funds-based lending rate rather than the prime lending rate.

At present, the sector is burdened with astronomical debt -- to the tune of nearly Rs 8 lakh crore by some estimates -- and heavy losses due to a slew of freebies which are being doled out by incumbent telecom players to retain their customer base.

The grim reality that the sector faces can be gauged by the comments made by Communications Minister Manoj Sinha at the recently held India Mobile Congress: "The government is aware of the stress in the sector... We will make sure that the sector does not die."

Currently, India's telecom network is the second-largest in the world after China, in terms of the number of telephone connections.

As per the Annual Report 2016-17 of the Department of Telecommunications, the country had 1,124.41 million telephone connections, including 1,099.97 million wireless telephone connections with an overall tele-density of 87.85 per cent.

Other estimates show that the mobile industry in India contributes 6.5 per cent ($140 billion) to the country's GDP, and employs over four million people (direct and indirect). (Source: Economic Times)

IUC charge cut may trigger a faster shift to VoLTE services

IUC charge cut may trigger a faster shift to VoLTE servicesThe 57% cut in interconnect usage charge and decision to scrap it altogether from January 2020 is likely to drive incumbent telecom operators such as Bharti Airtel BSE -0.43 %, Vodafone India and Idea Cellular BSE -0.58 % to rapidly launch and expand calling over VoLTE technology, and unveil more bundled offers to protect their turf, said analysts and industry experts. This could trigger a faster shift to data services from voice, which accounts for about 80% of revenue at present, they said.

The Telecom Regulatory Authority of India last week slashed IUC to 6 paise per minute, with effect from October 1. IUC is paid by a mobile carrier where a call originates to the mobile network where it terminates. In recent reports, Bank of America-Merrill Lynch and CLSA said that any move towards zero IUC, or a bill-and-keep model, would automatically compel incumbents to upgrade networks to voice over LTE or VoLTE, a technology which is currently offered pan-India only by new entrant Reliance Jio Infocomm, and migrate their traffic to cut costs.

The incumbent operators, of whom Bharti Airtel recently announced its commercial VoLTE services launch in Mumbai, have opposed the cut in IUC. The other two are in a testing phase of VoLTE. A senior executive of one of the top three incumbent telecom operators said that the steep cut in interconnect charges would “unfairly” force incumbents to switch to VoLTE networks even at a time when 90% of voice traffic in India still terminates on 2G, 3G and non-VoLTE 4G networks.

“The customer must be free to choose his preferred technology and it’s not for us to compel him to make a choice of one over another. With Trai throwing its weight behind one technology (VoLTE), there is clearly a travesty of justice, and the regulator’s commitment of being technology neutral is broken,” said the executive, who did not wish to be named. In a recent interview to ET, former Trai chairman Rahul Khullar backed this view, saying the regulator’s IUC regulation forces telcos to migrate to VoLTE, which requires fully dedicated IP-networks, ironically at a time when next-generation networks in India remain a distant thought.

Older operators currently offer voice services on the legacy circuit-switch technology, with data being offered on a 4G network and voice on a 3G or 2G network. VoLTE technology allows an operator to offer both voice and data on the same network, with voice being just another application that rides on an LTE data network, resulting in more efficient use of airwaves. Goldman Sachs warned that the latest IUC regulation underscores “the regulatory risks in the Indian telecom sector”, which could prompt “investors to question” whether further regulatory changes in the industry could hurt incumbent carriers. Kotak Institutional Equities said that such regulatory decisions “chip away at any incumbency advantage”. “Managing the regulatory side of the equation on grey areas like IUC is critical and incumbents have not done a good job here,” it said in a note seen by ET.

The top three incumbent telcos — Bharti Airtel, Vodafone and Idea Cellular — will be the biggest revenue losers once IUC is cut and then scrapped since they have the most number of subscribers and they garner a majority share of the IUC as most calls terminate on their networks. In the immediate term, brokerage Phillip Capital said, the IUC cut and the sharp growth in data uptake will prompt incumbents to unveil more bundled offers to protect average revenue per user or ARPU, although the near-term impact will be negative as profitability of such offers could be lower. Analysts at Swiss brokerage UBS said the shift towards zero IUC would accelerate the move of the Indian mobile market to bundled plans.

Big operators, it said, would “now be disincentivised to support low ARPU customers”, who primarily receive incoming calls, and may move them to “minimum threshold ARPU plans”. According to IBS, markets such as the United States, Hong Kong and Singapore, which have embraced zero IUC, are primarily post-paid markets where “customers have to sign up for bundled packages”. Phillip Capital, however, said it expects bundling and benefits of ARPU protection to provide some respite from the envisaged sharp drops in operating income (Ebitda) following the reduction in interconnect rates.

Goldman Sachs said while the IUC cut will hurt the top three telcos in the near term, the medium-to-long term impact is likely to be less pronounced as the traffic flow between incumbent telcos and Jio is expected to “become symmetrical over time”. (Source: Economic Times)

Mobile phone makers to miss Oct 1 deadline to roll out Indic scripts

SIM cards linked to Aadhaar: UIDAI Mobile phone makers are likely to miss the October 1 deadline for embedding Indian regional language software in their handsets due to issues involving standardisation of Brahmi script.The Ministry of Electronics and Information Technology (MeitY) had last year ordered that all mobile phones should be configured to enable users to text in all Indian languages from July 1 onwards.

The deadline was extended to October 1 after the industry sought more time to get their products certified by the Bureau of Indian Standards. Now, it seems there is confusion over standardisation of the Brahmi script. Pankaj Mohindroo, President of Indian Cellular Association, told BusinessLine that the industry has implemented the languages based on their own understanding; however, there was confusion over Brahmi specifications by the Bureau of Indian Standards, which has old characters.

“Since there is a lack of clarity, work is going on to come up with a new standard for mobile phones. We are working with MeitY to arrive at a solution,” said Mohindroo.

All the phone companies that BusinessLine spoke to confirmed that they were ready with the language capability, but the issue over scripts may come in the way of getting BIS approval. Industry observers said that though smartphones with operating systems like Android come with built-in capabilities for Indic languages, getting language capabilities in feature phones is not easy. Feature phones have limited memory, which makes installing 22 languages difficult.

Akshay Dhoot, CEO of Videocon Mobiles, said, “We are working with our ecosystem, including chipset manufacturers, to enable Indic languages, but we are not sure if we will be able to meet the requirements on all the models by October 1.”

Dhoot said the deadline should be extended by two more months at least so that mobile firms have enough time to address the issues; otherwise, it could lead to bugs creeping into the software, he added.

Shashin Devsare, Executive Director of Karbonn, said “We at Karbonn are committed to complying with the regulatory requirements, which include language as and when the directive is finalised.” Officials at MeitY said that concerns over script standardisation has been brought to their notice and a solution is being worked out. Asked if the deadline will be extended further, the official said a decision will be taken after assessing the implementation status. (Source: The HinduBusiness Line)

TCS to carve out a new brand identity for its artificial intelligence product Ignio

TCS to carve out a new brand identity for its artificial intelligence product IgnioTata Consultancy ServicesBSE -0.27 % (TCSBSE -0.27 %) is creating a product brand for its artificial intelligence (AI) product Ignio and has hired from US companies to drive sales of the standalone product, a move that analysts say is akin to building a software company with a different model to its traditional services.

The company is working to ensure the Ignio brand is a standalone — with a separate website that has minimal TCS branding. Digitate, the unit that houses Ignio, is only once referred to as a TCS venture.

“If you want to sell Ignio as a product, you have to create a product brand. TCS as a services brand is humongous. We have to make sure that the product can stand on its own. It is deeply embedded in TCS, but from sales and branding perspective, you have to create an identity,” Harrick Vin, global head of Digitate, told ETin an interview.

Vin added that initially clients were not necessarily clear about whether they would be locked into a services contract if they chose to use Ignio. The branding strategy, together with a revamped sales organisation, is meant reduce that uncertainty.

“We have created a sales organisation that is driving a lot of direct product-led sales. We are going to customers where there is no service–RFP and where TCS is not a service provider. We are entering those organisations with Ignio,” Vin said.

Currently, there are at least 10 sales executives from US product companies at Ignio.

Vin said the pipeline for Ignio as a standalone product was much larger than that for a services contract. He added the company was also focused on patents as a driver of valuation. “We have filed for 80 unique patents globally. Any product company will build a significant portfolio of patents. If you look at valuations of startups and product companies, they are often driven by IP portfolio. Strategically, it is an important thing to do.”

Indian IT companies have so far always sold their AI platforms as part of services and TCS is among the first to sell it as a standalone product. “TCS has taken a different approach to automation and cognitive computing than its competitors in the amount it is spending and that it is building its own software from the ground up and then attempt to sell it independently of its services,” Peter Bendor-Samuel, CEO at IT advisory firm Everest Group, said.

Bendor-Samuel said TCS, together with InfosysBSE -0.56 %, was the first Indian IT company to invest in intellectual property, but that its stable leadership over the years had helped it be consistent in its strategy and investments. “We will stabilise at this level in the near future. It is a product organisation, not a services organisation.” The unit is also in the process of making Ignio a cloud-based product, which will be sold on a software-as-a-service model. “When we put Ignio on cloud, we are also opening up ‘Ignio studio’, using which you can build apps for Ignio and make it do different things. We will open everything up. It will become much of an open platform,” Vin said.

Analysts also say TCS will have to better explain its vision for Ignio, even though it ranks among the top of the industry. “Clients are confused by all of these IT services platforms and the service providers are struggling to articulate their value and align them to real business needs and Ignio is no exception. Our research shows TCS is really pushing the envelope, recently ranking as high as fifth in the industry for its AI capabilities for enterprise operations,” Phil Fersht, CEO at HfS Research, said (Source: Economic Times)

Vodafone CEO Flags risks of lower interconnect rates

Vodafone CEO Flags risks of lower interconnect ratesVittorio Colao, Chief Executive Officer of Vodafone Plc, has warned that any move to reduce interconnect charges will lead to large-scale shutting down of unprofitable mobile networks in India. In a letter to Telecom Minister Manoj Sinha, Colao said: “Any move to further reduce mobile termination charges (MTC) risks destroying the very companies that have invested to build this industry.” “The existing rate of 14 paise is already below cost. Even at the present mobile termination rates, 15-20 per cent of our sites run at a loss. Any reduction in MTC risks large-scale site shut-down of already unprofitable sites in rural India and which would greatly diminish the population coverage of mobile telephony,” he added.

Earlier, Airtel Chairman Sunil Mittal and Aditya Birla Group Chairman Kumar Mangalam Birla had separately written to the telecom regulator TRAI seeking status quo on IUC charges.

The letters come amid a debate within the industry, initiated by TRAI, on the future of interconnect charges. Under the current regime, the operator on whose network the call originates pays 14 paise to the operators on whose network the call terminates. This money is paid because the operator on whose network the call ends carries the call on its network from an exchange to the end user. This requires the operator to invest in setting up infrastructure.

However, newer operators such as Reliance Jio have been pushing for a ‘Bill and Keep’ (BAK) model wherein the interconnect charge is reduced to zero. RJio claims it has a greenfield 4G network that allows it to offer voice calls practically at zero cost.

Loss of termination fee
If this model is adopted, incumbent operators stand to lose on the termination fee they collect. That’s because the incoming calls into an incumbent operator’s network is always higher than the incoming calls into a new operator’s network. As a result, a new operator ends up being a net payer of termination fee. Colao said: "In the BAK regime, the consumers pay for incoming calls, which is unrealistic for Indian consumers”.

Challenging RJio’s stand, the Vodafone CEO said: “There is a view being propagated by the new entrant that as a 4G-only operator, it has a cost advantage of about 70 per cent compared to the established 2G/3G/4G operators. There is no evidence – either Indian or international to support such a claim. “It is undesirable for a critical core industry like telecom to be regulated based on the ambition of a new operator with no history of financial sustenance,” Colao added. (Source:Hindu Business Line)

Finding a successor for Sikka will be no walk in the park

Finding a successor for Sikka will be no walk in the park“I will not try to pretend that we will have the same kind of felicity in attracting overseas talent that the organisation had a while ago.

‘‘But it is that very task we have to address even more rigorously, by providing the right environment for people to come and innovate and create new products and services,” said R Seshasayee, Chairman, Infosys, now faced with the onerous task of finding a successor to Vishal Sikka, who abruptly quit the software major as CEO on Friday

HR heads and honchos at executive search firms feel that this is easier said than done.
“Infosys’ ability to attract senior management talent will be seriously impaired after Vishal Sikka’s exit, as his are not small shoes to fill. Potential candidates will be wary of joining Infosys at the CXO level after all that has happened and many more exits can be expected over the next few weeks, especially those that were hired in the US and worked closely with Sikka.

“This isbecause, after Vishal the centre of action will shift to Bengaluru, so the top-level hires in the US will understandably be uneasy about the direction of the company,” said Ronesh Puri, Managing Director, Executive Access India Pvt Ltd.

The challenge of finding the right man has been thrust on the five-member Nominations and Remunerations Committee (NRC), comprising, besides Seshasayee, Jeffrey S Lehman (chairperson), John W Etchemendy, Kiran Mazumdar-Shaw, and DN Prahlad.
The Infosys Board has made it clear to the NRC that Sikka’s successor must possess extraordinary people skills and must buy into the strategy and vision of the company, continuing on the path where the company has already started tasting success.

“It is important that a 200,000-strong global organisation like Infosys has a leader with great people skills, who understands the company’s culture, integrates into it and then changes it and moulds it as necessary. The NRC and the Board will have to see whether these requirements are best served by one of our leaders inside or whether the next part of the race will be better served by an outside candidate with no preconceived ideas at this point” said Ravi Venkatesan, co-chairman, Infosys.

In 2014, Infosys offered the CEO’s role for the first time to an external candidate.
Sikka, who was a member of the Executive Board of SAP, accepted the challenge of helping transform the company during a time of significant change in the services industry. However, this time around attracting global talent of Sikka’s stature is likely to be a near impossible task given that Infosys’ standing as an employer of choice has taken a nasty beating.

Anshoo Nandwaani, CHRO, Greyhound Knowledge Group, feels the Infosys management does not want a forward-looking CEO who will reinvent the wheel, but a COO who will imbibe the existing culture, execute on the existing strategy and bring back normalcy.
She agrees that it would be extremely difficult to hire senior global talent, with no takers for the hot seat at infosys, especially after Sikka’s exit. (Source: The Hindu BusinessLine)

*astTECS to Showcase Collaborative Enterprise Communication Solution at Indo – Africa ICT Expo 2017

*astTECS to Showcase Collaborative Enterprise Communication Solution at Indo – Africa ICT Expo 2017*astTECS, a leading provider of enterprise telecom technology products and Asterisk based Open Source communication solution, today announced, that the company will be showcasing emerging and innovative portfolio of Enterprise Telecom and IP PBX solution at Indo – Africa ICT Expo 2017, scheduled to be held from Sept 6-7, at Lagos, Nigeria. *astTECS will be demonstrating cutting - edge enterprise communication solutions relevant to the African markets and engage with the ICT community.
With extensive deployment of communications infrastructure, growing digitalization and mobility the African countries offer amazing opportunities.

The Indo – Africa ICT expo provides a compelling platform to showcase robust and innovative communication solutions focusing on how African countries can implement them to bring in greater operational efficiency, enhance productivity for stronger growth, evolve and maintain a competitive edge.

“Africa has been one of the fastest growing markets worldwide in ICT adoption & communication technology and the African region offers tremendous opportunities,” said Dr. Devasia Kurian, CEO, *astTECS. The ICT expo provides a platform to draw up more synergies and create an ICT ecosystem that brings together stakeholders from across the communications industry spectrum, he added.

With strong focus on customer needs, *astTECS Made-In-India products & solutions serves users across the globe and the company continues to leverage its strong capabilities in product innovation, helping enterprises and SMEs capitalize on latest in technology and adapt to customer’s communications requirements and evolving market opportunities.

*astTECS offers the most comprehensive, integrated and compelling Telecom Infrastructure Solution based on Asterisk platform that are feature rich, helps improve consistency & performance and creates a scalable, stable and resilient network that optimizes value. (Source: Convergence Plus)

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