Indian Telecom is Looking Bright and Prosperous

The Indian telecom sector has undergone a major transformation since key policy reforms were initiated in the late 1980s when telecom equipment manufacturing was opened to the private sector, followed by the National Telecom Policies in 1994 and 1999. Historically, the telecom network in India was owned and managed by the government. It was considered a strategic service, best under state control. However, when the telecom revolution in other countries in the 1990s resulted in a better quality of service along with lower tariffs, Indian policy makers opened up the telecom services sector. India is divided into 18 telecom circles and four metropolitan jurisdictions.

Today, India is the fourth largest telecom market in Asia, after China, Japan and South Korea. It is also the eighth largest telecom network in the world and the second largest among developing countries. In wireless telecom, India is one of the world’s fast – growing mobile markets, adding 6.4 million subscribers a month on average.

Although wireless penetration is just 13% among a population of 1.1 billion (compared to 40% in China and close to 100% in Western Europe), India is forecasted to have 525 million mobile subscribers by 2010, but wireless service providers may have to be consolidated to make services more affordable through higher economies of scale. For its part, the Telecom Regulatory Authority of India (TRAI) has developed a set of M&A norms that have limited the market share of a merged entity to 40% in the particular market, against the earlier 67%, based on the number of subscribers and revenues.

Given the continued growth opportunity, Foreign investors are lining up to enter the Indian Market. In Late 2006, AT&T became the first foreign telecom operator, in partnership with Mahindra Telecom, to obtain a telecom license under the foreign direct investment policy that allows up to 74% foreign ownership. Vodafone, the wireless operator based in the UK and the half-parent of Verizon Wireles, recently acquired a 52% stake in Hutchison Essar, which was renamed Vodafone Essar. Russian telecom major, Sistema, has acquired a 10 per cent stake in Shyam Telelink for fixed – line, cellular and internet services in the North Indian state of Rajasthan.

Major telecom operators in India include Bharti Airtel, Reliance Communications, the government-owned Bharat Sanchar Nigam, and Vodafone Essar.

Cablevision to bid in 700MHz Spectrum Auction

US cable operator Cablevision Systems has submitted paperwork to bid in the Federal Communications Commission (FCC) spectrum auction in the 700MHz band in January 2008. Cablevision is the second Cable provider, after Cox communications, to get in on the wireless spectrum bandwagon.

Cox will bid on its own, and Comcast, Time Warner Cable and Charter Communications will not participate. AT&T Mobility and Verizon Wireless, two the main National wireless carriers in the U.S. plan to participate, while the Satellite provider EchoStar Communications is also rumoured to be in the running. Other confirmed bidders include Leap Wireless, MetroPCS and Google.

The auction of the 700 MHz is billed as one of the most important in this century – primarily because this swath of spectrum can be used for very high speed wireless services and part of the spectrum has to be ulitized with ‘open acess’, where a customer can bring any device and use any software on any mobile device. This essentially makes the wireless services a bit-pipe, much like how DSL and Cable Internet services work today.

FCC bans Exclusive Contracts for Cable TV

The Federal Communications Commission (FCC) recently voted to ban exclusive contracts between cable TV providers and the owners of apartment buildings, condominiums and planned subdivisions. This is a good move by the FCC (see Ushering a New Era of Consumer Choice in Set-Top Boxes for another cabled related good move by the FCC), which is expected to promote competition and reduce cable rates for an estimated 100 million consumers.

The problem with long-term cable contracts is that if an apartment, condominium, or subdivision enters into an exclusive agreement with a cable company, then other TV providers are hampered from offering service, even if subscribers want another service provider. This issue is made worse by exclusive cable contracts that last indefinitely (a small number of idiots have apparently done this!). Frankly, I don’t see much benefit in exclusive cable contracts when satellite is available.

I am in this exact situation – the town I live in has an exclusive contract with a small cable TV provider. Incidentally, the contract was given to a close relative of the mayor – something smells fishy here! Residents here can get satellite service, but they still have to pay the mandatory charge for the cable TV service whether they use it not.

The biggest benefit of this ruling may be for telephone service providers who offer TV services over Fiber (FTTP or FTTH) or copper (e.g. AT&T U-Verse). Of course, some cable TV competitors will benefit as well, as they will be able to serve apartments, condominiums, and subdivisions that were not approachable due to long term contracts.

However, there are benefits to long-term exclusive agreements; Property owners can negotiate rates in return for guaranteeing a large number of customers for cable providers, who otherwise might be reluctant to invest in setting up the last mile connection into buildings. Overall, everyone benefits – the cable provider gets subscribers, customers (tenants) get cable service, and property owners are able to market their properties better because the property has cable service. The customer lock-in is the only hitch!

The question is whether competitive cable providers have access through the same wires or does every cable service provider have to develop its own last mile network. I suspect it is the latter, which also means that property owners may have to pay more to rewire buildings for competitors – this is going to make this ruling mostly ineffective.

The FCC ruling is a good first step, but I’m not sure if this will resolve many of the problems associated with exclusive contracts. As for me, I am hoping that I have the choice to cancel my cable service and not have to pay for it (I can get satellite for less)

Your thoughts?

FCC shoves mobile roaming down large cellular carriers throats

The U.S. Federal Communications Commission recently enacted rules dictating that mobile carriers provide roaming services on a nondiscriminatory basis. That is, cellular telephone service providers must allow customers of competitors to connect to their networks at a “reasonable” cost, when the equipment is technologically compatible.

The new rule stopped short of setting roaming rates or investigating roaming fee violations. Also, it is limited to voice calls, text-messaging, and push-to-talk services. The FCC didn’t include broadband data services in the roaming order, despite the urging by the Rural Cellular Association to set roaming rules for both voice and data. After all, mobile handsets are used not just for voice, but for a wide array of data services. This didn’t happened probably because the republicans in the FCC put to stop to that. Given that the FCC has declined to set roaming rules three times since 1996, this is a step forward and a victory for consumers and for those smaller (and mostly) rural cellular carriers.

In contrast, the Europeans recently went further – the European Union requires cellular operators to provide a so-called Eurotariff of 0.49 euro cents per minute for making calls and 0.24 cents a minute for receiving calls in another country by 30 July 2007. This makes sense because Europeans frequently travel among the many countries in Europe, most of which have technologically compatible wireless networks.

Large mobile carriers like Sprint Nextel argued against new roaming rules, saying a competitive market place was resolving the issue. Sprint Nextel also argued that more than 8 percent of wireless calls were roaming calls in 1996, compared to less than 2 percent in 2006, and that average roaming charges have dropped from $0.82 per minute in 1995 to $0.04 in 2006.

Frankly, big companies liked the status quo because they made good money from roaming fees to subscribers of small carriers. Big wireless companies such as AT&T (Cingular), Sprint, and Verizon Wireless provide coverage over huge swaths of populated areas, so they command more “roaming” clout over a smaller carrier. As a result, roaming charges are particularly high for subscribers of small, rural carriers accessing large carriers’ networks. In fact, the complaint is that large carriers are charging heavy roaming fees to customers of smaller competitors.

The ruling fell short, but another good move by the FCC nonetheless!

Anti-Caller ID Spoofing Law to put a few companies out of business

About a month ago, the United States Senate Committee on Commerce, Science, and Transportation passed S.704, the “Truth in Caller ID Act of 2007”, a bill that would outlaw causing “any caller identification service to transmit misleading or inaccurate caller identification information” via “any telecommunications service or IP-enabled voice service.” Essentially this bill makes it a crime to spoof caller ID.

This bill doesn’t outlaw caller-ID blocking (and that’s a good thing), but makes it unlawful for anyone in the United States to use misleading or inaccurate caller ID information in connection with any telecommunications service (including Voice over IP ). For example, all those prank calls you made to your friends with the Caller ID “Dept of Homeland Security” will be illegal. Law enforcement and court ordered authorizations are exempt. A similar bill was recently passed in the U.S. House of Representatives, making it a real possibility of becoming law.

I really like this idea because I believe that people should not to be tricked into thinking that a call is from someone when it is actually from another person. I can see that debt collectors and foreclosure agents trying to get to consumers by using this means. Not to say that foreclosure agents and debt collectors don’t have a legitimate reason to call. Another big use of Caller ID spoofing is for pretexting, which is used to fraudulently obtain personal records of someone else. Pretexting has been a big issue lately.

The easiest way to spoof Caller ID is to Voice over IP (VoIP) or T1 PRI lines. Anyone can get a VoIP service, but T1 PRI lines are expensive because it has 23 phone lines and usually is for businesses.

There are several companies that offer Caller ID spoofing. Most of them work like a calling card, where the user dials a toll free number, and enters the pin number, desired Caller ID, and the number to call. Prices start at $10 for 60 minutes of talk time to U.S. and Canada numbers.

When the law passes, these companies will have to change their business model or go bust.

Some of the companies are: Telespoof, SpoofCard, and PhoneGangster (wow, nice name!)

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