ITV

Tag: Telecom companies

  • Net Neutrality: TRAI receives a million mails, Indians awaits judgment day

    Net Neutrality: TRAI receives a million mails, Indians awaits judgment day

    MUMBAI: One of the largest mass movements online in India came to an end as we crossed the 24 April, 2015 deadline day to send online responses to the Telecom Regulatory Authority of India (TRAI).

     

    The Net Neutrality debate began after Indian telecom operators lobbied to TRAI to change certain rules as per their convenience, which would have a direct impact on the consumer’s pocket. TRAI, in response to the telecos on 27 March, released a 118-page long consultation bulletin, which concluded by asking 20 questions. The last date to respond to that bulletin electronically was 24 April, 2015 while all the counter responses could be sent till 8 May, 2015.

     

    From 27 March to 24 April there have been certain incidents, which managed to ruffle quite a few big feathers. Many came on record to make a statement.

     

    Some of the major developments throughout the net neutrality debate tenure are as follows:

     

    All India Bakchod (AIB) Video

     

    AIB’s video conveyed the message – “Internet is not a luxury but a utility” and the video ended with a link (www.netneutrality.in), which directed people to the net neutrality home page where all of TRAI’s 20 questions were answered in detail. One could send an email with the pre-written answers by a single click or could edit the replies and send it as well. The video saw the Internet savvy youth getting into action and a complex concept like net neutrality spread through word of mouth as thousands of mails were sent to the Authority.

     

    Net Neutrality Website

     

    www.netneutrality.in: After AIB’s video, thousands of people came to the website and mailed TRAI with the pre-written responses. The website also posted all the developments that were happening around the topic, tweets of dignitaries and most importantly the number of mails that were sent. The website also shared their perception which read, “The Internet’s success in fostering innovation, access to knowledge and freedom of speech is in large part due to the principle of net neutrality — the idea that Internet service providers give their customers equal access to all lawful websites and services on the Internet, without giving priority to any website over another.”

     

    Internet.Org Backout

     

    Internet.org is a Facebook-led initiative, which aims to bring five billion people online in partnership with tech giants like Samsung and Qualcomm. In India, Facebook partnered with Reliance Communications to provide free Internet access to 33 websites as part of its Internet.org initiative, which came under controversy and raised quite a few eyebrows with free Internet activists saying that it violated the idea of net neutrality. Major participants like Flipkart, Cleartrip, NDTV and Times Network, which had earlier joined this initiative, opted out later as the Net Neutrality debate gathered momentum in India.

     

    NDTV co-founder Prannoy Roy tweeted, “NDTV is committed to Net Neutrality and is therefore exiting, and will not be part of Facebook’s Internet.org initiative.”

     

    Mark Zukerberg’s letter

     

    Facebook founder Mark Zukerberg wrote a note justifying the Internet.org initiative. It read, “In many countries, there are big social and economic obstacles to connectivity. The Internet isn’t affordable to everyone, and in many places awareness of its value remains low. Women and the poor are most likely to be excluded and further disempowered by lack of connectivity. This is why we created Internet.org, our effort to connect the whole world. By partnering with mobile operators and governments in different countries, Internet.org offers free access in local languages to basic Internet services in areas like jobs, health, education and messaging. Internet.org lowers the cost of accessing the Internet and raises the awareness of the Internet’s value. It helps include everyone in the world’s opportunities.”

     

    He further added, “We fully support Net neutrality. We want to keep the Internet open. Net neutrality ensures network operators don’t discriminate by limiting access to services you want to use. It’s an essential part of the open Internet, and we are fully committed to it. But Net neutrality is not in conflict with working to get more people connected. These two principles — Net neutrality and universal connectivity — can and must coexist.”

     

    TRAI chairman Rahul Khullar’s statement

     

    “There are passionate voices on both sides of the debate. And if that was not enough, there’s a corporate war going on between a media house and a telecom operator, which is confounding already difficult matters,” Khullar told The Indian Express. “They have a moral anchor… Equally, there are others on the opposite side. But there are many others in between that one should not ignore despite the passionate nature of the debate between the two extremes. We need a democratic debate on the issue, not shrill voices,” he added

     

    Sabka Internet Campaign

     

    The battle for net neutrality in India saw an interesting twist after the Cellular Operators Association of India (COAI) launched a campaign called Sabka Internet. The Sabka Internet initiative was launched to counter the net neutrality campaign. The campaign communicated the positives of the zero Internet venture, where one gets whatever they pay for.

     

    Million Mail Mission

     

    In a span of 12 days, a million emails were sent and the ‘million mails’ mission of Netneutrality.in was accomplished before the due date. That sums up the entire net neutrality voyage.

     

     

  • TRAI study reveals telecom sectors growing pains

    TRAI study reveals telecom sectors growing pains

    MUMBAI: With foreign promoters increasing their stakes or purchasing the stakes of Indian promoters in telecom companies such as Aircel, Unitech, Sistema Shyam, Bharti Airtel and Vodafone, the latter’s total shareholding of major telecom access providing companies has dropped from 59.77 per cent in the year 2007-08 to 40.42 per cent in 2011-12.  A study paper released today by the Telecom Regulatory Authority of India (TRAI) on shareholding, financing and capital pattern of Indian private telecom access service providers (TSPs) has revealed this.

     

    It attempts to provide an overview of the capital structures (deployment of funds in the form of owners’ equity and loan fund) of companies operating in the telecom sector based on the annual accounts and other information provided by 24 Private Telecom Access Service Providers.

     

    The study paper also points out that while the share of Indian promoters in the equity shareholding declined from 59.70 per cent in 2007-08 to 56.63 per cent in 2011-12, the share of the foreign promoters has increased from 5.30 per cent to 13.90 per cent in the same period. So while Unitech, Tata and Vodafone have reported a decline in Indian promoters’ equity, Bharti, Unitech, Tata, Sistema Shyam, Loop and Vodafone have seen an increase in the stake of foreign promoters in equity shareholding.

     

    The study paper is a comparative study of facts in the year 2007-2008 and 2011-2012. The trend indicates that the preference shareholding of Indian promoters and others has declined from 60.89 per cent (2007-08) to 2.62 per cent (2011-12). This decline is mainly in the case of the Tata group. The share of the foreign promoters in the total preference shareholding has gone up sharply from 0.59 per cent to 95.84 per cent. The increase in foreign promoter’s shareholding is Rs 5,988 crore and is mainly in the Aircel group.

     

    Foreign currency loans for these companies have gone up from Rs 13,929 crore in 2007-08 to Rs 40,045 crore in 2011-12. The increase in foreign currency loans in 2008-09 over the previous year was attributed to the borrowings by Reliance Communications and Idea Cellular.  Reliance, Tata, Bharti Airtel and Idea have the major share (88 per cent) in foreign currency loans/bonds outstanding at the end of year 2011-12.

     

    The study shows that Bharti, Vodafone and Reliance have not shown any change in their share capital.  Idea’s share capital has increased 26 per cent from Rs 2,635 crore in 2007-08 to Rs 3,309 crore in 2011-12, making it the only TSP showing that kind of growth. Total reserves and surplus in respect of Vodafone have declined from Rs 9,991 crore to Rs 2,975 crore, whereas the total reserves and surplus of other companies have shown an increase.  As on 31 March 2012, while Bharti, with Rs 50,470 crore had the highest reserves and surplus; Tata showed negative reserves and surplus of Rs 4,748 crore.

     

    As on 31March 2012, Vodafone had the highest debt of Rs 45,332 crore followed by Reliance at Rs 31,195 crore and Tata at Rs 23,986 crore. Vodafone and Tata have shown persistent increase in debt during the past five years whereas the other three service providers have shown fluctuating trends in debt.

     

     The study also highlights the fall in EBITDA margins for almost all the TSPs over the past five years.  Bharti’s EBITDA has gone up from Rs 11,447 crore in 2007-08 to Rs 15,441 crore in 2011-12; however as a margin it has fallen from 41.96 per cent to 33.82 per cent. Vodafone’s and Reliance’s EBITDA has declined from Rs 6,247 crore and Rs 5,175 crore in 2007-08 to Rs 4,248  crore and Rs 3,018 crore in 2011-12 respectively.

     

    Vodafone’s PBIT has declined very sharply from Rs 3,473 crore in 2007-08 to Rs 27 crore in 2011-12 while Tata’s has been negative throughout the period and has declined progressively from a negative Rs 1,194 crore to a negative Rs 2,275 crore over the past five years.  Ditto with Reliance which has seen its PBIT fall during 2008-09 and become negative in 2009-10 and 2010-11; however it has improved and become positive in 2011-12.

     

    The study talks about the problems plaguing the TSP sector.  It says that “After their initial success, the Indian telecom companies are confronted today with serious growth challenges. The sector is characterised by mounting competition, declining average revenue per user (ARPUs) and rising costs. All these factors have put tremendous pressure on operating margins. The main reason cited by telecom service providers for declining profitability are their inability to pass on cost inflation due to hike in the price of power and fuel, debt servicing burden and the declining value of the rupee. This has been further aggravated by the prevalent tariff competition.”

     

    It goes on to add:  “Each telecom service provider is endeavoring to focus on growth and investment, improvement of profitability and cost control without compromising on the quality of service to the customer.  Of the several strategies being adopted by the sector to witness growth include: focus on development of network and eco-system for 3G and 4G services; shifting towards outsourcing model where various medium and long term leasing arrangements for towers and other network infrastructure have been made with the third party operators or equipment vendors; maximising share of passive infrastructure in the short-term and initiating efforts to share active infrastructure over the longer term etc.”

     

    The study concludes that the low market tariffs and the presence of large number of service providers in each licence service area have caused profitability to decline and made the telecom sector less attractive for infusion of equity.

     

    New investments are therefore being financed through debt. Sector indebtedness is growing.  However, the sector’s debt-equity ratio has not as yet reached alarming proportions. On the other hand, the declining profitability of the sector, which lies at the root of the inability to attract fresh investment, is a cause for deep concern.

     

    The study also indicates that some portion of debt is being utilised for interest payments and other liabilities rather than for acquisition of new assets, which potentially places the companies in a debt trap. Replacing debt financing by equity financing could help increase profitability by reducing the interest burden.

     

    The report published by the TRAI also says that in order to turn around the financing pattern and the deteriorating profitability position of the sector, apart from measures and strategies of individual companies, clarity needs to emerge on the following policy issues and optimal utilization of resources:

     

     · Emergence of an enabling environment for mergers and acquisitions to aid in market consolidation;

     

    · Permission and policy framework for sharing, trading and sale of underutilised or unutilised spectrum by service providers so that spectrum is optimally utilised;

     

     · Liberalisation of spectrum usage to enable flexibility in deployment of alternative technologies;

     

     · Improvement in the availability of power to run telecom networks so that network operations require less fuel and captive power generation.

  • In pursuit of what in 2007?

    In pursuit of what in 2007?

    The CAS word gets TAM India CEO LV Krishnan thinking about what this brave new world could mean for the likes of the airtime sales exec and media planner.

    In the shifting sands of time the mind does seek for a grip; In the solitude of space constant change is unnerving; only the whiff of victory
    propel one to destination

    As the sun set on 2006, the glow of the last rays had fired the embers left behind by the changes initiated in the arena of TV channel ground distribution during the last few months. The beginning of 2007 itself is seeing a market place oscillating between the old fashioned Analog Technology to a new era of Digital Technology unleashed on the unsuspecting TV viewers by the Government, Multi System Cable operators, Broadcast Satellite owners as well as Telecom companies. With technology gizmos flying all around as well as the jargons attached to it, one is left wondering, what is going on in the simple minds of a Media Planner and Air time Sales member of our industry? Does large industry issues we debate about, top their concern? Take a guess…

    As one mingled with many of them, the concerns or issues were the same… What are we pursuing at the end of the chase?

    A perspective from the Media Planner’s diary

    March 2006: I read in today’s Media website that the Delhi High court has given a ruling to the effect that Conditional Access System is mandatory in South of Mumbai, Delhi & Calcutta for receiving pay TV. This was going to happen in the next few weeks…

    …Whoosh!

    June 2006: It didn’t happen…does it ever happen as proclaimed?

    …Zip…Zap!

    December2006: Will it happen this month? Will await Dec 31st to know…

    January 2007: It happened!

    As I walked into my office the very next day…the first day of the New Year, I wondered…

    Gosh, what will happen to my life? My Brands – Media Plans & Buys are ready to be executed, but now, will I have to put everything on hold? What will I answer my client? Will plan deliveries fall down in the 3 Metros? By how much? What is TAM data indicating?

    In a confused state of mind, I decided to get out of office to take a walk along the Worli sea-line hoping for some fresh breath from a magic genie.

    Yes, the winter air was filled with a new whiff. No doubt it was energizing my legs as I broke into a steady walk. As I took a sample of the freshness of 2007, the mind cleared to open up new possibilities staring at us… potential of ensuing change began to dawn on me. The revolution was just beginning and I was determined to ride the wave of change.

    With a renewed vigour, I walked back to my desk to put a call to my client. He was pretty surprised to hear me say that I will be coming down to meet him the same evening to explain to him the consequences of changes happening in the TV media.

    Next, I started with some desk work. I wanted to understand the magnitude of the change expected to be brought about by the CAS notification on Zone 1. A simple analysis from NRS 2006 as well as the TAM CAS document circulated earlier indicated to me that 1.6 million C&S homes across the 3 metros of Mumbai, Delhi & Calcutta will come under the purview. This meant one-fifth (20%) of C&S homes in the 3 metros or just one-twentieth (5%) of C&S homes represented by TAM All India Class I town panel.

    Hence if all the homes in the notified areas for CAS in the 3 metros did not go for set top boxes, the maximum impact in reach of my media plan due to of loss of viewing of pay channels on a National level is going to be less than 5%. In other words, the planned reach of 60% on a National scale could come down to 57%. This could only be the worst scenario. But things are already looking better with demand for set top boxes on the rise with each day passing…

    I then looked at my media plan composition – list of Pay TV channels & Free-to-Air TV (FTA) channels used to deliver the reach. On comparing this with the Free-to-Air channels available, I decided to make a few minor adjustments whereby by making minor spot changes between Free-to-Air & Pay TV channels, I was easily able to hike up the planned reach to 58% on a National level!

    As I started receiving the news that the demand for CAS set top boxes are increasing, I decided to stretch the brand campaign by a few days. This could help me leverage any additional homes that moved into using a set top box for accessing/viewing Pay TV content.

    What made me feel even more confident about achieving the media plan goal was the news that almost all the homes acquiring a CAS set top box will receive all the Pay & FTA TV channels he used to get before Dec 31st. This meant that, while in theory CAS set top box was supposed to act like a filter by providing the viewer with the choice to subscribe, at present it is only used as an enabler to watch all Pay & FTA TV channels which was available to the viewer earlier as a simple cable TV home. Thus, viewer behaviour in terms of channels watched post CAS set top box acquisition couldn’t have changed, thereby helping me to deliver my planned reach goals too.

    I am awaiting with bated breath the first TAM CAS penetration study later this month, more to understand the length of time it is going to take for viewers to start experiencing a shift to the world of digital content. I for one will be looking for the profiles of the CAS homes to try and plan execution of the new brand creative my marketing manager has promised. I have lots of ideas up my sleeve, waiting to explode in the digital space!

    A perspective from the Airtime Sales member’s diary

    January 2007: I looked up my watch and exclaimed “Damn it, going to be late again.” It was all because of this silly traffic…

    2007 had started with a sense of purpose. Yes, there were changes happening around. Positive, I could say. I was heading to meet a very important Up-market personal product marketing head. I was pleased that I could get the appointment after struggling for some many months to get it…only because I was going to show him something different!

    From the telephonic chat I had with him yesterday, I could sense his voice perk up when he heard about my channel’s new programming, showing promise among his set of exclusive consumers.

    I got out of the cab and rushed across the street clutching hard to my presentation papers. I approached the front office of the organization gasping for breath. The receptionist looked at her watch, acknowledged my presence on the intercom and then, silently led me to the massive board room. As I sat, wrapped around by the chilly air sent out by the humming air-conditioner, my mind whirred with excitement. At the same time, I had a sense of apprehension as it was for the first time I was going to present the findings about my channel from the Elite panel and I was not sure, how the marketing head could react.

    Suddenly, a booming voice saying “Hello” came in from behind. As I turned around, I came in contact with the marketing head, who was by then extending his arm to welcome me. Pleasantries were exchanged and we got quickly to the brass tracks.

    I opened my small presentation folder displaying the sheets about his products and target consumers. I could see him nodding to my opening statements. I was feeling relieved that I was bang-on in guessing his product’s consumer profile. This led me to draw up the next few sheets that explained the profile of viewers my channel catered on a daily basis. I could see him show inquisitiveness to my reports. Soon we got drawn into the discussion about my channel’s performance and the question I was waiting for all along got popped out. “How do you say that my consumers watch TV and therefore content related to your channel?”

    My best was yet to come. I opened up the data from the Elite panel to reveal to him the new, latest finding…

    His Up-scale consumers did spent time watching TV (unlike his thinking), but they spent less time watching it vis-?-vis the average TV viewer and even an SEC A TV viewer on the TAM National panel.

    The other important observation that impressed him was that the TV viewership of the Elite viewers was far more fragmented as compared to an average viewer and also the SEC A viewer in the National panel.

    While 26 channels accounted for 80% of viewership for the SEC A viewers, it took 35 channels that made up 80% share of viewing for the Elite viewers, a testimony to the wider content preference for the Elite! This invariably means that, in order to reach to the Elite viewers, the marketing head had to consume air-time across more channels of distinct content appealing to his Up-market consumers.

    As I progressed with my charts and comments, the final one hit the bulls-eye. Certain genres like English Movie channels, Business news, English news & English Entertainment channels had a visible skew towards the Elite audience as compared to even the SEC A viewers in the National panel. This made the marketing head look up. I could see a huge smile on his face as he made the comment “I always knew this and keep saying so to all my team members.” I just smiled back at him with the hope that I could have finally bagged the campaign, I thought, that deserved to run on my channel.

    It did happen as I visualized the very next moment. The marketing head picked up the nearby intercom, spoke a few words to the person on the other end, and then turned around to me to say the final words, the most precious words I have been waiting to hear “…the campaign will include your channel too.”

    That evening, I was certainly heady. We celebrated the win back in the office with a champagne pop up. 2007 indeed has begun for me in a new way I couldn’t have imagined a few days back. A real nice kick start and I hope to keep riding that way!