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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: mightylakers who wrote (6416)	1/23/2001 12:14:26 PM
From: JohnG	Read Replies (1) \| Respond to of 197056

INDIA Article in FT JohnG news.ft.com India faces wireless battle By Caroline Daniel Published: January 22 2001 18:45GMT \| Last Updated: January 22 2001 19:36GMT Less than half an hour after opening its doors to offer registration forms for a new cheaper, mobile phone service, the New Delhi offices of MTNL, the majority state-owned telephone company, were besieged by thousands of prospective subscribers. The rush underlined the hunger for communications in India, at least in the urban centres. However, in the country's vastly diverse market the signals are mixed. Just 3 per cent of the population has any kind of telephone. There are 3m mobile phones and 28m landlines for a population of a billion or more. Developing the mobile phone sector - rather than digging up the ground for more landlines - is seen by the government as the best way to change that. But its efforts to improve India's poor communications infrastructure by making mobile phones more available have run into opposition from cellular operators. The dispute was prompted by proposals, set out this month by the Telecom Regulatory Authority of India (TRAI), which would allow fixed line operators to offer "limited mobility services" on their networks through the Wireless Local Loop (WLL). How the matter is settled will influence investment strategies and the growth of the Indian market. The services proposed by the TRAI would be more basic than normal mobile phones. Users would only be able to use their phones within about a 50km radius, rather than being able to roam from Bangalore to Bombay. Calls could be cheaper - the regulator recommended Rs1.2 per minute (just over 1 cent), against about Rs4 offered by private operators. "Our challenge is to have a faster rollout to as many customers as possible," said Shyamal Ghosh, secretary at the Department of Telecommunications. The target is for 50m mobile subscribers by 2005. "In this context, WLL is an option for rollout." Cellular operators disagree. They say the plans could create a unique international system, combining two standards - a landline based CDMA mobile service and a GSM cellular service. They also argue fixed operators are being let into the market at cheaper licence fee rates and spectrum charges. Fixed operators also benefit from more advantageous rules governing fees from long distance calls. Sudershan Banerjee, chief executive of Hutchison-Essar, a joint venture between India's Essar group and the Hong Kong group, said: "Populism has taken over compared with the national interest." Cellular companies are already struggling. Early assumptions about growth were over optimistic. "The process of auctioning went off target because calculations of market size did not meet expectations," admitted Mr Ghosh. "So licence fee defaults started and the whole situation practically came to a standstill." Reforms in 1999 were aimed at resolving this. They included plans to increase the mobile phone licences in each state from two to four. That is now coming into force with the arrival of MTNL in the market. Cellular companies say this is already driving down prices. Essar-Hutchison and Airtel, a joint venture between Bharti Enterprises and BT of the UK, have cut rates ahead of MTNL's new tariff of about Rs2 per minute. "Prices are already coming down, so why try to bring in a new service with limited mobility?" said Manoj Kohli, chief executive of Escotel, a joint venture between the big Indian group Escorts and First Pacific of Hong Kong. Mr Ghosh - in spite of his admission that working in the sector has "greyed my hair" - is unfazed by the critics. He puts faith in the mantra more commonly professed by western telecoms regulators: competition. "Although there will be a large number of subscribers satisfied by local coverage, revenues primarily come from those who want value added services. The customer segments are not necessarily the same. There is enough space for everyone." Even as the cellular companies wait for the decision of the telecoms commission on these plans, they still face a tougher battle. As Mr Kohli put it: "Many customers have not even used a landline phone, so there is still a big technology jump to GSM phones." Escotel has spent the past four years trying to persuade rural villagers of the benefits of mobiles. It has benefited from its association with Escorts, which as a manufacturer of tractors, earth moving equipment and motorbikes, is well known in rural areas and already has a dealership network. "Where a grandfather sells tractors, his grandson may now set up a mobile dealership." In the southern state of Kerala, many fish and prawn fishermen have phones. "They can make phone calls about 7km out to sea and call ahead to check which market is offering the best rate for their fish and sail to where the price is best." Even so, in its four years of operation, Escotel has attracted just 300,000 customers. That suggests that the task of connecting up the Indian population will be a long and arduous one.