Monday, February 01, 2010

Unexpected Benefits from 3 G Delay

Vasu Reddy from Chicago

The continued delay in auctioning 3 G spectrum has not slowed the mobile subscriber growth in India. The month to month growth rates are amazingly stable and remain robust. By observing the debates on policy, planning, finance, legal and general issues of 3 G licenses, and in an environment that finds ways to delay any policy decisions, it is quite likely there will be a further delay in the auctions. We have newer reason today than we had a few weeks ago, or for last several months and years.

Subscriber growth rates being constant simply shows that the existing operators with the already allocated spectrum have enough capacity to maintain the robust growth, and the delay in 3 G is not causing any reduction in loading new mobile subscribers. It’s quite a valid observation as to the value of the existing networks having the ability to continue with the growth in user base.

By assuming that at least 2 new entrants will come into the foray with 3 G licenses, the already operating dozen or so networks in each region will only get more competition for the same subscribers. The delays pretty much limit the growth of operators in the short run, and might also allow for some consolidation in the market place. There is no doubt that we don’t need a dozen operators in each market. Consolidation will further improve coverage, network quality along with better usage of spectrum. All of them benefits to the customer, DOT and also the markets.

MTNL and BSNL have had 3 G airwaves for about a year now, and have not made any headway in loading up 3 G subscribers. Accept making noises of 3 G services both these operators have not benefitted by having the spectrum. Its time to look at why MTNL and BSNL are not attracting 3 G customers, if there is such a huge demand for the services? While the policy and other issues are being sorted out by the powers in Delhi, the failure to lure 3 G customers by MTNL and BSNL can be understood to develop the appropriate business and engineering plans to develop the 3 G customer acceptance. There is a perhaps simple reason such as services, value addition, cost, handsets, coverage, speed and the entire regular attributes that a particular customer expects to purchase the service, and may be at this time they do not exist in the Indian market, or the customer simply is not ready to upgrade to the next generation mobile services.

MTNL and BSNL can use the time left as 3 G monopolies to shore up their advantages to develop best practices and solutions to attract customers, and with the already established network and perhaps another year of monopoly in the 3 G arena, they can makeup for the losses in the 2 G and fixed line networks. The government should allow them to act quickly and decisively with 3 G planning and execution (unlike the decision making with 2 G sourcing which is at the speed of a snail) to capture the first in market advantages that certainly exist in the Indian mobile market.

MTNL and BSNL also will not have to pay the 3 G spectrum fees until such time the government. This certainly helps in keeping the cash with them and utilizing the resources for another year or so. This helps them with the balance sheet and also leverage for some more time.

The delays are unwarranted and purely because of poor planning, and too much tinkering by the policy makers. As of now, the proposed auctions have so many difficulties and issues, it may be best to just scrap the whole exercise and start fresh. The unexpected (perceived) benefits do not support the delay in 3 G auctions and launching these services. Albeit it illogical not to take immediate action on 3 G (while the rest of the developed markets might be looking at 4 G and beyond), there is some truth to the benefits of the delays to the existing networks, which have yet to recover costs of deployment.

Thursday, January 28, 2010

Finding Common Ground

Vasu Reddy from Chicago

Telugu people have more than just their language as common ground. We are for centuries have had our language, heritage, literature, culture, traditions, food, education, people and progress together, while we shared the misery, poverty, backwardness, poor politics and wasted opportunities together, while the past few years have shown progress of the cities and certain aspects of the population in isolation.

The last two months have derailed probably a couple of decades of progress in employment, education and progressive investment climate. No one benefits in an environment where the Universities are used for political activism, and shutdowns are called on by the most insignificant politicians. People have to live with the fear of being persecuted for just going to work or school and normal citizens will not risk it.

The state had tremendous respect in the central government just a few months ago with a chief minister who did things his own way, and delivered every potential populist promise to the people of the state. With the death of YSR there is no leader that can rein in the warring political factions even within the same political parties.

People of the state have lost billions in opportunities, and the current crop of students will lose a year of their life to this unmanageable crisis to the state. It might be fun to miss school for a few days and skip exams this semester, but it can never be made up in a life time. Lost time and opportunity for every student will never be returned. Parents and families toil very hard to pay for the kids to go to schools and colleges will be burdened to do this again and have to pay twice for the same. Outside of the loss of time and money, the students are exposed to the violence that comes with the political instability which will stay with them for a life time. No one wins, and we are given a common ground for all to lose, and just lose with this agitation.

Unfortunately it is too late to save the kids or educational institutions. We have them pawned by politicians who have chosen them as sacrificial lambs in a political agitation. There is no agenda for any regional aspirations and there will never be one as the development of entire country will simply destroy the traditional political equations. When people are self sufficient and law abiding, politics will find common ground to cater to the public to stay in power, but we must first get to that stage where the kids will be throwing away a year of their education and parents helpless in doing anything to stop it.

Sunday, January 03, 2010

Spectrum Sharing

Vasu Reddy from Chicago

Another year and another month are up on us, and the growth of Indian telecom users continues unabated. The delays with 3 G licensing continue, as they continue to get postponed. The political issues between telecommunications and armed forces continue and many meetings have been organized without any definitive outcome. The CDMA and GSM operators continue to have their differences and no end in sight for a unified telecom forum. MTNL and BSNL are enjoying the 3 G spectrum but have nothing to show for the usage, as no user base to show for the expensive and limited resource granted to them, and they continue to lose market share to private operators. On the global front countries are launching 4 G networks, while India grapples with 2 G technology issues and 3 G auctions, which have been forthcoming for at least 3 years.

The good news about the whole charade is that the users don’t seem to care about the politics of spectrum and technology. They continue to grow in numbers and benefit from the ability to communicate. Perhaps the shareholders of the networks may have had some settling down in the returns, while the price per minute is continuing to be pleasantly appealing to the users.

The quality of service remains good with the networks and normal issues of crowding in the major markets is not yet an inhibitor to users. With 100% plus penetration in some major markets the services are stable with minimal disruptions to users.

There are a dozen or so operators in each circle and even if we don’t add new operators, there will no limiting the services offerings. Perhaps it is time for some radical thinking to manage the available spectrum, while allowing industry consolidation and new investments.

India has the engineering abilities to be ingenious in maximizing the utility of the available spectrum, while catering to the needs of mobile subscribers. For instance two scenarios can be contemplated as the continued delay in 3 G will only make the networks obsolete before they are launched.

(There is absolutely no scientific or engineering proof of what is being suggested, but it is not incomprehensive to imagine the scenarios for India)

Firstly, BSNL and MTNL already have the 3 G spectrum nationwide, and quickly construct the network. They can lease per user based space to all network to have their own registered 3 G subscribers to have the utility of a nationwide network, and come-up with a revenue sharing scheme similar to paying roaming costs to each other. All the operators can immediately start selling the services and retain their own user base, while offering the high speed wireless services. With the poor customer relationship effects of BSNL and MTNL, this may be a hard sell but if the pressure of private networks is added to the management of government controlled networks, there is bound to be some improvement in the areas of customer service. In reality the government networks are built quiet well and have good quality of service. This will immediately start to provide much needed 3 G services to private network operators, while eliminating the entry cost of the spectrum, and also eliminates the uncertainty of winning a block of spectrum.

Secondly, if there is resistance to BSNL and MTNL names, then scrap all the existing 3 G licenses and create one pan India network co-owned by all players who are interested in being a part of the consortium. Essentially the government creates a block of spectrum that is frozen (for example 50 MHZ total to all 3 G services) and all interested companies can pay an initial fee and join the consortium. Each operator identifies their own subscribers and the services are common to all users. In India this can be a socialistic network run by a consortium of people and a majority of the shares can be held by the market and disallow a single person or family to control the network. Limiting the maximum ownership to 5% to any one party can bring some sensibility to decision making and the government itself can be a stakeholder by providing spectrum for its share of the 5% stake. All players can provide towers and have technology decision made by majority. It will not be difficult o organize in a country that is run by coalition governments, but will be a novel concept of public-private enterprise with a common network while different networks owning their own subscribers in 3 G space. Long behold if this works, there will be uniform pricing and little room for subscriber churn in 3 G as there will be no reason to move to another network because of quality of service or service offerings.

Revenues to DOT and to the operators are still generated by the current mechanism, and there will be no impact on alternative spectrum sharing scenarios. It can be a huge 30 MHZ shared network in either scenario, which will be able to meet the demands of both the users and operators, and will have enough capacity to deliver the promise of high speed wireless.

Trying something radical and out of the box will solve many issues for Indian telecom market. The Indian market has the size and strength to have manufacturers devise efficiencies to deliver better services to its users. As outrageous as it sounds there is some merit to a massive shared network with all operators as stakeholders and all users are beneficiaries.

Friday, January 01, 2010

Leadership Vacuum

Vasu Reddy from Chicago

Amazingly the state that contributed the most number of MPs to UPA government in 2009 and bringing Congress to power in the center for the second consecutive term seems to get no respect to dealing with the crisis situation with separation activity and destruction of wealth.

The death of YSR last year seem to have brought terrible lack of leadership, experience and intelligence to handle the complex state of affairs Andhra Pradesh seem to have fallen into today. With in weeks of the death of the leader of the state, the affairs seem to out of control and illogical for a common man to appreciate of understand why the state has fallen into such terrible predicament.

The current chaos is not a upraising in general public which was disenchanted with the administration or general living conditions. The state was seemingly doing quite well until Dr. Reddy’s untimely death, and all of a sudden fall into the crisis of every possible situation with natural disasters, political ineptitude, financial difficulties, unresponsive central administration and generally leaderless situation. A bunch of failed politicians and opportunistic voicing of opinions and disastrous reading of the state crisis by the central administration further complicated the December 2009 for the people of Andhra Pradesh.

Not a single policy or political statement has come out to handle the current crisis which has destabilized the state, curtailed the educational process, inhibiting the development process, created political inaction. All we hear is crappy language from people who really had no political stature prior to Dr. Reddy’s death. All of a sudden people are suffering the idiosyncrasies of every elected politician, who all of a sudden seem to have found a voice to blabber utterly idiotic words aimed at each other and nothing to stop the destruction of property in the State. No politician had died and they have successfully faked fast unto death schemes.

The central government has no handle on the sentiments of the people, and continues to dilly dally about the pronouncements of the politicians. If the politicians don’t represent the interest of the people in the assembly and work to improve the possibility of really representing the needs of the electorate, they should dissolve the entire assembly and appropriate measures should be taken to first install representatives who will stop personal abuse and present people’s issues.

There have been many issues that have been many divisions of states, and sometimes combining of territories in India. There is no reason for Telugu people to suffer such inept political process. Our people should reject the violence and admonish the people who are instigating the destruction. People should stop listening to illogical statements and pronouncements from failed politicians. The public should live normal life and stop miscreants from destroying property, and continued inconveniencing of life by the political parties.

Telugu people living across the world have the abilities, resources and wisdom to resolve their issues peacefully. We must strive to choose proper representatives that will bring the current chaos to a halt and successful process of meeting all Telugu peoples needs; both short and long term. We should reject the politics of destruction of our systems and life.

YSR may have had his own style of functioning, but certainly kept all political parties and people to work with each other, while engaging the central government to listen to the state’s issues. We should seek leadership, or provide leadership to enhance the value systems of Telugu people, and not be held hostage to the failed politician’s survival tactics.

Look for true solutions to erase the poverty, improve basic infrastructure, commonsense, education, jobs and right set of political infrastructure. When we do the right things to improve our state, division or together, will be a successful process.

Past Perfect

Vasu Reddy from Chicago It has already happened. Past is already on the books, recorded, and can’t be changed.   It ...