Most strikingly, Indian companies have produced a new type of innovation, variously dubbed “frugal”, “reverse” and “Gandhian”. The essence is to reduce the price of a product or service by a breathtaking amount—80% rather than 10%—by removing unnecessary bells and whistles. Tata Motors is selling its “people’s car” for $3,000; GE’s Indian arm offers a medical ECG machine for $400; Bharat Biotech sells a single dose of its hepatitis B vaccine for 20 cents and Bharti Airtel provides one of the cheapest wireless telephone services in the world. These frugal products are likely to disrupt established Western companies (including GE itself) by forcing them to engage in a bloody price war.

Zain has fared badly in Africa along with other Middle Eastern operators perhaps because their home turf has been heavily regulated. Most acted as comfortable monopolists until only recently. Bharti on the other hand has a good deal of experience in wringing out profits in a poor country where competition is growing. Africa merely adds more diversity and the potential for political instability to the challenge. It helps, too, that Bharti brings expertise of running low-cost operations in markets where consumers have very low incomes. It does this by sharing infrastructure and outsourcing most operations such as IT and running networks, leaving the risk of expanding to meet the needs of subscribers to others while it concentrates on marketing and strategy. And Bharti’s size and clout should allow it to pay much less than Zain for network towers and the like in Africa.

Bharti’s ability to concentrate on its customers should yield rewards in Africa, where innovations to bring down costs to customers have already helped to boost profits of other firms. MTN, for example, pioneered dynamic tariffs that charge users to make calls according to how many other callers are using a network at a given time. And Zain’s own scheme of “borderless roaming” lets customers move between Kenya, Tanzania and Uganda and make calls without incurring disproportionate charges.

Innovation can travel the other way too. We hope that Bharti will import to South Asia the borderless roaming that Zain introduced to the world.

An update.

Phone charges are same for prepaid and post paid. Cannot figure out why one should go for post-paid.

There is also a broadband package for Rs. 300. (Minimum commitment)

Download the rate sheet for more details.

The question most who phoned our office last week asked was: When Bharti Airtel will start its Sri Lanka operations? We have no clue why they assumed LIRNEasia is linked to the Indian telco that plans to launch its operation in Sri Lanka shortly. So our polite answer was: Sorry, we do not know and we do not have Bharti Airtel phone number.

The website www.airtel.lk too was not much of help. It like a massive bill board in front of a cinema hall, just says ‘Coming Soon’. Please do not mistake the guy in the middle to be Santa. You might not see him anytime within the festive reason. Looks like Bharti Airtel’s initial plans to start its operations in December is not going to materialise.

If someone knows better, please update us. We’re all ears!

This includes higher termination rates (levied for ending calls from a new operator’s subscriber to an incumbent player’s network) and port charges (for accepting traffic from a new player to an existing network).

Incumbent operators such as Bharti Airtel and Vodafone are at an advantageous position because they have a large subscriber base and, therefore, it is necessary for the new players to interconnect. If the new operators do not interconnect with them then their subscribers will not be able to call users on the incumbent player’s network.

“The interconnection charges being imposed by the existing players are based on the telecom regulator’s order issued in 2003. Since then the costs have come down drastically. However, the existing players want to continue with the current charges because it benefits them,” said an executive of a new telecom company.

Read the full story in ‘The Hindu Business Line’ here.

“We will roll out the services next month as all formalities are done and issues relating to inter-connectivity have been sorted out,” Bharti Enterprises vice-chairman and managing director Rajan Mittal told reporters in New Delhi.

The telecom giant had been facing problems of inter-connection, with local carriers not willing to give inter-connections to the company.

Source: Hindustan Times, Nov 04

The objective of the fund is to provide opportunities to the entrepreneurs to undertake innovation in the field of telecom with regard to content, software and technologies, Bharti Airtel Joint MD and CEO Manoj Kohli told reporters.

This is the first ever telecom innovation fund in the country, he said.

Source: The Economics Times

“Discussions are going on with the Sri Lankan telecom regulator and the existing operators there relating to the interconnection issue. It should be sorted out shortly,” company’s CEO Manoj Kohli told reporters here.

“We should be in a position to start our operations there before 2008. It is as per our schedule,” he said.

Earlier a Senior Executive of Bharti Airtel, Sanjay Kapoor said the incumbent operators in Lanka are not giving interconnections to the company, which is anticompetitive in nature.

Responding to that four Sri Lankan operators had issued a joint statement yesterday terming Bharti’s allegations as false.

The four operators – Dialog, Hutch, Mobitel and Tigo lashed out at Bharti Airtel on being accused that they are preventing the company’s entry into the island by not providing interconnection on the same terms.

Source: Press Trust of India

Leading mobile firm Bharti Airtel signed up 2.7 million customers, enough for it to overtake state-run Bharat Sanchar Nigam Ltd as India’s largest telecom firm by total subscribers, including fixed-line subscribers.

Second-ranked mobile firm Reliance Communications added 1.75 million customers, and No. 3 Vodafone Essar, controlled by Britain’s Vodafone Plc, added 1.76 million.

India is the world’s fastest-growing market for wireless services and the second-largest market for such services after China, with growth fuelled by cheap handsets and call rates as low as 1 U.S. cent a minute.

See the full story in Reuters here.

According to the Financial Times, Bharti has indicated it would be willing to pay about $19 billion for 51% of the company. That would make it the heftiest overseas acquisition ever made by an Indian firm, more than Tata Steel paid for Corus, a British steelmaker, and seven times the amount India invested in the whole of Africa over the ten years to 2004.

The deal would unite the leading companies in the world’s two most promising mobile markets. In neither market have penetration rates yet exceeded a third of the population. India is adding more subscribers per month than any other country. In Africa, subscriptions are projected to grow by 11% a year until 2011, according to Gartner, a research firm.

Red the full story in ‘The Economist’

“Growth features such as rising consumption, elasticity of demand and economies of scale will continue to be the main themes for the growth markets, including China, India and Indonesia, which are still under-appreciated by investors, in our view,” UBS said in a report.

India and China, the world’s fastest-growing mobile markets, added around 8 million mobile phone subscribers in October, taking their user base to approximately 217 million and 531 million, respectively.

Read the full story in Forbes.com

The operators added more than 8m mobile-phone subscribers in October, bringing the total to over 217m. India has met its ambitious target, set two years ago, of 250m fixed and mobile-phone connections. But the government is sadly unprepared. It has not given India’s mobile operators enough space on the radio spectrum to carry calls crisply and reliably. India, the operators complain, faces a “spectrum crunch”.

In November Sunil Mittal, the chairman of Bharti Airtel, wrote to India’s telecoms secretary describing the “extreme anguish” caused by the “pitiful” amounts of spectrum granted to operators using GSM technology, the dominant standard that is used by three-quarters of Indian subscribers. The government had said it would provide extra spectrum to firms once they had amassed enough subscribers. Airtel, for example, was supposed to receive an additional allotment in Delhi once it passed 1.6m subscribers. It now has over 3.6m and is still waiting.

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In yet another blow to the existing GSM operators, the Communication Ministry has decided to auction spectrum for third generation (3G) mobile services and wireless broadband services through technologies such as Wi-Max.

The auction will be open to new companies wanting to foray into the telecom sector as well as established foreign telecom players. The existing operators had wanted the auction for 3G services to be limited to the licence holders.

The Ministry’s decision to open up the bidding to all players is also a move away from the telecom regulator’s recommendations that it be restricted to existing operators. The move gives a chance to the likes of Deutsche Telecom, AT&T and new Indian players such as Unitech and Hindujas, which may not get spectrum in the 2G band given the huge rush, to enter the high growth telecoms market. This means that existing GSM operators such as Bharti Airtel and Vodafone Essar, after being asked to rope in more subscribers for being eligible for more spectrum for 2G services, will now have to fight it out for a piece of 3G spectrum.

Read the full story in ‘THE HINDU Business Line’