India Roundup: Tender Times, Stock Issues

It's been a truncated business week in India due to Independence Day on Friday, but there was still plenty to keep telecom industry-watchers busy. Here are some of the highlights:

  • The Department of Telecom (DOT) has set the ball rolling for its 3G and WiMax auctions, publishing a request for proposals (RFP) on its Website Thursday for an agency to run the proceedings. According to the schedule included in the documents, the RFP will be formally issued on Aug. 18, eligible bidders will be selected on September 3, and financial bids of technically qualified bidders will be opened on Sept. 19.

    The DOT is looking for bidders with experience conducting at least five auctions in the last three years, with a value of at least 25 billion Indian Rupees ($582.92 million).

    Auctions are expected to be held within the next couple months, with spectrum to be allocated by the end of the year. (See India Edges Closer to 3G.)

    The DOT is apparently moving ahead with the process despite the objection of the government's finance ministry, which says it should have been consulted on the pricing of spectrum.

  • Bharat Sanchar Nigam Ltd. (BSNL) , which is guaranteed both 3G and WiMax spectrum as a state-run operator, is moving ahead with its rollout plans. The carrier said Tuesday it has placed an order for 5 million 3G lines with Ericsson AB (Nasdaq: ERIC), which will be rolled out in about six months' time, while chairman and managing director Kuldeep Goyal told the Press Trust of India Thursday that BSNL is in talks with several vendors to roll out WiMax-based Internet access to common service centers (CSCs) in 25,000 villages throughout rural India by the end of this financial year. CSCs are essentially staffed telecom kiosks equipped with computer facilities to provide rural Indians with access to government services online.

  • While BSNL is negotiating with employee unions to move forward with an IPO, Reliance Communications Ltd. (RCom) has, temporarily at least, dropped its plans for an IPO of its wireless tower infrastructure unit, Reliance Infratel. The company filed its prospectus with the Securities and Exchange Board of India (SEBI) in February and received approval in May, giving it 90 days to launch the offering. (See Reliance Infratel Files for IPO.) That period lapsed on Aug. 11.

    Anil Ambani, Reliance's chairman, said on the company's recent quarterly earnings call that it's holding off on listing both Infratel and its international services arm Global Cloud Xchange due to the "volatility in global and Indian capital markets." He added, "When we find an appropriate time, I am sure that we will proceed both with Globalcom and Reliance Infratel."

  • Meanwhile, Idea Cellular Ltd. has stock issues of its own in its acquisition of Spice Telecom . (See India's IDEA Buys Spice for $750M.)

    The mobile operator has delayed its open offer for Spice's 20 percent publicly traded stake following delays in receiving approvals from the Securities and Exchange Board of India. The offer was scheduled to open on Aug. 22 and close on Sept. 11, but in a statement filed Thursday with the Bombay Stock Exchange, IDEA said a "revised schedule of activities... will be announced separately on receipt of observations from SEBI."

  • Mahanagar Telephone Nigam Ltd. (MTNL) has stalled in its bid to acquire Sri Lankan operator Suntel for lack of a joint venture partner, reports the Economic Times. The Indian state-run operator is looking for a partner to take a 50 percent stake in Suntel, which has 300,000 CDMA-based wireless local loop customers. MTNL is branching out abroad to offset falling market share in New Delhi and Mumbai where it operates, and already has a joint venture in Nepal along with a subsidiary in Mauritius.

    In its domestic markets, MTNL is trying to lure new users with a mobile TV service and has halved the price of its broadband services in New Delhi, an offer effective from today for new subscribers and from Sept. 1 for existing customers.

    — Nicole Willing, Reporter, Light Reading

    Interested in learning more on this topic? Then come to Broadband 2.0: Making the Business Case, a 2-day roadshow that will provide attendees from among India's fixed and wireless carrier communities with an exclusive and intensive overview of how broadband wireline and wireless services can be enhanced to improve ARPU, ROI, and churn. The event will be staged in New Delhi on September 10 and Mumbai on September 12.

  • lrmobile_kumaramitabh 12/5/2012 | 3:34:26 PM
    re: India Roundup: Tender Times, Stock Issues New Regulations permitting Internet telephony in India: A revolutionary opportunity for WiMAX in India

    The Telecommunications Regulatory Authority of India ( TRAI), chose the occasion of the Independence day in India to let the Internet Service Providers ( ISPs) loose of the severe restrictions which permitted any form of internet telephony. ( See Amitabh Kumar: "Indian Telecoms: Critical Deviations in the Post WTO Era") The new regulations now allow ISPs to not only provide internet telephony but also connect to telephony switches in India and overseas in order to provide end to end telephony services. ( See TRAI recommendations relating to Internet Telephony).
    This changes , in its entirety the business model which the WIMAX operators had been going ahead with in the country. With only data revenues to count on the WiMAX, which is ideally suited for deployment primarily in rural areas, was essentially a non-viable proposition. Despite this serious handicap, high investments have been going in this sector just because any form of wireleless broadband can not be had in the vast hinterlands of the country for love or money.
    The business case for WiMAX operators just got stronger with telephony calls being permitted, which can form an important source of revenues in rural areas and also give the new wireless ISPs access to Universal Service Obligation funds.

    The recommendations of the TRAI are quite unusual in as much as they signify a complete reversal of its stand wherein it had been holding forth strongly to the view that only the Universal Access Service licensees and Cellular mobile operators, which were otherwise entitled to provide the telephony services were the only ones which could also provide VoIP and Internet telephony services. However these licensees enjoying much higher ARPUs from standard telephony were not inclined to push Internet telephony even though they were enjoying corresponding benefits from overseas Internet telephony operators.

    What this means now is that operators can lay an overlay WiMAX network and make their business plans centered around VoIP and telephony amongst other services. Coming just prior to the WiMAX spectrum announcement policy ( 3G spectrum is already announced), the new recommendations convey the serious intent of the TRAI in promoting broadband in the country, presently beset with one of the lowest per capita usage in the World.

    WiMAX operators, on the other hand need to quickly revise their business plans.

    see http://www.wimaxbook.net/forum...
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