It would be the biggest thing to pass between India and South Africa since Mahatma Gandhi moved from one country to the other. This week it emerged that Bharti Airtel, the largest mobile-phone operator in India, is holding “exploratory” talks to buy South Africa’s MTN, the biggest operator in Africa. 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.
India’s Bharti Airtel, China Mobile and PT Telekomunikasi Indonesia are UBS’s top three telecom investment picks in Asia for 2008, as their home markets enjoy strong growth rates. “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
Telecoms in India | Full-spectrum dominance | Economist.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.
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.
Reliance Communications took the competition in domestic telecom head-on as it reported operating margins similar to bigger rival Bharti Airtel in the July-September quarter. RCom’s robust performance was aided by higher growth in its wireless and broadband services along with increased operating efficiency. Net profit has surged 86% to Rs 1,305 crore (USD 330 mil) year-on-year backed by 30% rise in sales to Rs 4,579 crore (USD 1,166 mil). Operating profit has grown 46% while revenue from wireless business grew 45% and the broadband segment 61%. Read the full story in ‘The Economic Times’ Meanwhile India’s largest wireless operator Bharti Airtel on Wednesday announced a 73% increase in second quarter net profit at Rs 1,617 crore (USD 412 mil) , compared to Rs 934 crore (USD 238 mil) for the quarter ended September 2006.
Foreign telecom investors, who hold significant stake in India telecom companies, are exploring the possibility of joining hands and initiating an arbitration proceeding against the government of India and department of telecom (DoT) in foreign courts against the new telecom policy. The move comes as some of the foreign investors say the that the new policy announced last week, which allows dual technology “favoured only CDMA players, especially, Reliance Communications”. Besides, the new policy has also enhanced subscriber-linked criterion for spectrum allocation by multiple times – this implies, operators such as Bharti Airtel, Vodafone, Idea Cellular cannot get additional spectrum in their existing circles unless they increase their subscriber base between two-six times, a process that will take anywhere between 18-48 months. This has also led to the pending applications of all GSM players being disqualified. The new norms, if implemented, will hit the expansion plans of all telcos and also lead to a heavy increase in the capex for the next couple of years.
Mobile phones are about to become the simplest and quickest way to transfer money across borders, under a deal announced yesterday by Western Union and GSM Association, the main mobile phone operators’ body. The agreement could have a big impact on global cross-border remittances, worth an estimated $500bn a year, and provide a springboard for mobile carriers and Western Union to offer other mobile banking services using “mobile wallet” technology. Cross-border money transfers valued at up to $100 in countries such as India, the Philippines, Mexico and China – which have large volumes of remittances from migrant workers – will be an early priority of the deal. Thirty-five mobile operators with 800m customers in more than 100 countries have signed up to take part in the GSMA Mobile Money Transfer pilot scheme led by Sunil Mittal, managing director of Bharti Airtel. Other participants include MTN, Orange, Orascom, Smart, Telenor and VimpelCom.
Today, at a ceremony to sign a large number of investment agreements at the Board of Investment of Sri Lanka, it was revealed that Bharti Airtel, Sri Lanka’s fifth mobile operator, is planning to invest USD 150 million. This amount is below industry expectations and suggests that Bharti will start slow, with a conventional rollout concentrated in the Northwestern, Western and Southern provinces. Pity.
Sri Lanka: Cutting it Mobile phone use is taking off in Sri Lanka – though not, perhaps, in ways that service operators might have hoped. FROM THE ECONOMIST INTELLIGENCE UNIT In the world’s poorer countries, the purchase of a mobile phone has become increasingly affordable. Using it, however, can still be a struggle. Low-income mobile phone owners in Sri Lanka are getting around this problem with a novel method for keeping costs down. Known as ring cutting, mobile phone subscribers rely on ring tones to communicate with others, rather than actually staying on the line to talk.
Sri Lanka’s telecom sector soared in 2006 to 7.3 million users, led by a 59% jump in new mobile phone connections on competition and falling call rates, an AFP report said. Quoting the industry watchdog Sri Lanka Telecommunications Regulatory Commission, the AFP report said despite a waiting list of around 366,000 for fixed-line phone services, mobile phones, including GSM and CDMA systems, had allowed rural residents to get phone services immediately. The AFP report further said fixed-line subscribers rose to 1.9 million in 2006 from 1.