you have helped me a lot in preparing my project report, which is about telecom sector.
thanks a lot.
keep it up….

The new subscribers in India are coming at around $2 ARPU, which will make it tough for the operators to sustain them over long time. The operators need to manage the costs of maintaining the subscribers and one such way could be charging a premium to call on the ‘customer care’ line.

Another way of subsidising services for these low ARPU subscribers would be to rent their “Caller Tune” service like a voice hoarding to corporates which in turn would help the telecos to ask for a rental from the corrporates and post that as credit into the subcribers account who has put his caller tune on rent. This way also a telco could make some profits, while subsidising the service by around 30 cents.

The handset vendors need to launch variants of popular models, like without Infrared as that has been taken over by bluetooth, and thus continue to create the demand, while releasing one more handset in the replacement market.

Rgds

Good time for merger and acquisition, some of the European and Asian operatiors will be on sale, cash reach companies will acquire them.

Revenue growth will be minimal or negative in middle east, Asia will grow slow.
Negative revenue growth in middle east will be on account of slow down and negative population growth. You may see negative population growth in Kuwait in Q408 on account of job loss , people are moving back to thr countries after losing thr job, Same will be the case of UAE, Bahrain and Qatar.

India’s revenue growth will be slower on account of competition (Reliance GSM, and TRAI’s tariff reduction).

I am currently working, among other areas, on routines to aggregate demand so as to turn what is perceived as high risk investment in infrastructure into low risk leasing deals underpinned by long term contracts.

One of my class at Business School (London Business School MSc06, i.e. 1971 -3) made millions doing just that during the UK rail privatisation when the rolling stock operating service companies were formed.

They were floated as supposedly risk investments when they had 3 – 5 year contracts and the timescales for new build meant these would inevitably be extended to 10 -15 years. He expected to make money but not nearly so much as quickly as he did. When others realised what he had done he was bought out with even cheaper finance than he and his partners had raised.

Most current UK costings for next generation fixed/mobile broadband networks are cloud cuckoo land wet dreams which can (and must) be radically cut (sometimes by 75 -80%) by the imaginative use of existing infrastructure.

The other side of the equation is to aggregate public and private sector demand. This is easier said than done but I have been involved in both failed and successful exercises in the past. Then add 3 – 5 years contracts, including with those who pay up-front for “must have” facliities, and crisis turns into opportunity – including to pull through mass-market demand for next generation multi-media mobile devices.

Recession then turns into opportunity when major suppliers support patchworks of incremental, local networks, using mixes of terrestrial and satellite wireless and fibre for both trunking and local distribution. That requires, however, going outside their marketing channels.

That is much easier said than done unless and until desperation drives innovation – I had five years as a Corporate Planner (i/c planning and budgeting for the European Subsidiaries, Middle and Far East, R&D, “office systems” and “innovative applications”) with a multinational operating in most countries of the world.

The temptation to follow the herd can be overwhelming. It was often up to me to “prove” to my board that we would do much better by not joining the lemmings.

Because I had been hired because I had previously been a business development manager with a major ICT company, including risk assessments on bleeding edge innovations and changing markets, I had credibility and prevented the organisation from going down a whole series of financial black holes by no only encapsulating risk analyses into analogies that the board would understand but also giving them lower risk/high profit ways of obtaining “bragging rights” as to our leading edge credentials. Part of the approach was to focus on market, as opposed to technology innovation, while supporting a long-standing “family” of enthusiastic academic and SME innovators who brought us their ideas to test out. The other part was to have a stable of low cost alternatives that would enable us to increase market share when times were hard but leave on the back burner when times were good and we were able to milk the cash-rich, sense poor.

That did, however, mean ignoring calls to” optimise”. Today’s optimal solution is tomorrows sub-optimal
solution. And the moment you assume linearity in any solution (as do far too many economists and mathermaticians) you have assumed away both problem and innovative solution – and joined the lemmings.

Philip Virgo, Secretary General,

EURIM,
The Information Society Alliance

http://www.eurim.org.uk

virgo.philip@eurim.org

- It forces more re-evaluation of where products and markets are headed and how greater value can be delivered to under-served populations.
- If you believe that the environment is a growing concern, then it can be seen as a needed wake up call. Because many of us have jobs in the industry as marketers, developers or analysts, we tend to drive for growth above all else. Growth is beneficial but we must increasingly think in terms of social costs and benefits trade offs. I happen to believe that ITC including mobile devices provides positive net environmental impact and magnified social impact that more than justifies continued promotion. But we must keep in mind that growth is not written in stone. Further compelling the industry to become lower cost, environmentally friendly including lower power consumption and self configuring distributed networks helps the continued proliferation of mobile broadband at a lower cost and more acceptable environmental impact.

So, as painful as this may be, including in personal terms as fellow colleagues may face layoffs, there has been a growing need for society to rethink how it grows so that it becomes more sustainable.

Economic downturns usually result in acceleration of some trends such as commoditization of basic services and resurgence of reseller channels. We saw this happen to some degree during previous cycles, although we are now reaching into somewhat economic unknown territory.

Also, I feel that handset vendors should target markets like India with better support. Imagine the size of the market lost to fake batteries, headsets etc.

With HSPA and LTE knocking on the door, and the need for mobile broadband on the rise network modernization become immenant.

Hence, there is a good opportunity for vendors and we still see the spending spree on the go, probably less than the last few years.

Today we heard of BT signing a deal for a global VoIP QTalk product, and one can get the feel of cost obsession which the vendors more or less practicing the same.

BR,
Akram Tamimi

I enjoyed your article. In some areas, I believe the telecom industry is quite healthy. Those involved in expanding broadband networks will likely fare well over the next few years. Subscibers today would rather give up their landline phones than give up HS Internet access. Is life possible without Google?

On the other hand, it appears that IPTV expansions beyond the Tier 1 market will suffer. New projects will likely be put on hold, with the justification being, that service providers wish to wait for technology to mature. The real answer is, they don’t want to invest scarce capital in anything that will not turn a near-term profit.

One rather new entry, Over-the-top video, I think could be the dark horse. TV Subscribers today have HDTV with over 200 channels. They sit in their easychairs and say, “Nothing’s on!” I believer that OTT video will be a reasonable means of entertaining ourselves through tough times, rather than watching the news and thinking of our fathers’ stories about the Depression.

Thanks,

Tom Swan

The grade of the impact will vary according to geographical region. Here in the gulf region the impact is less because of avialable cash from the days of the booming oil prices. Carriers in this geographical area are still considering aquisitions and mergers and are also lookingg for ” inside house” re-arrangement and restructuring to cut on costs and increase quality of service to customers. For vendors and professionals with OSS/BSS understanding and experience this might be a golden opportunity. The same could also apply for System Integrators and experienced Project Managers.

Best Regards,

Ahmed Kamel

As correctly stated by you, CAPEX and OPEX are the key challenges in 2009 and 2010. Cost is going to play a vital role. Vendors either cut their margin and earn on economy of scale or get out of box idea to deliver more in less. Good think look from network SON (Self Optimization of Network) features. How well they are designed and minimum manual intervention.

Vendors will pay a big role by demonstrating that saving on CAPEX by bringing down cost per MB and OPEX by reducing maintenance cost (high MTBF), optimization and planning cost, size of equipment (reduce lease cost, etc).

Content vendors should seriously look into innovative business models for charging for content – other than advertising. Companies like Google are making all (or most of) the money by directing their users to the content they are looking for!

I enjoyed your article!

I would like to add a couple of points:

Not all operators in Asia and Africa are small and dependant on foreign capital to expand nor are they constrained by lack of working capital. Operators in China are investing huge amounts of capital to rollout 3G networks, which should provide a huge boost to some handset manufacturers and equipment vendors.

There are also several Middle Eastern operators (e.g. MTN, Batelco) that have strong balance sheets and are seeking to acquire new operators/licences in Middle East and Africa, which again should provide a boost for equipment vendors and handset manufacturers.

I am in agreement with you that mobile entertainment should increase in times of recession. However, for this to happen each of the various players (operators, handset vendors, development community, etc,) need to adopt a more “open approach” and work together to develop workable business models. There are lots of separate initiatives such as GSMA’s OneAPI and as you mentioned the apps stores (Nokia, Apple, Android, etc.), which should help content providers increase their revenues but perhaps there needs to be more collaboration between these various initiatives to result in a “win-win” for the industry.

Jeanette

What have Japan’s operators done in anticipation of the crisis? They have largely eliminated the handset subsidies and changed the handset business models which has greatly improved the financials of the operators and has been very bad for the handset industry, again read the detailed analysis and data in our JCOMM report on Japan’s telecom sector:
http://www.eurotechnology.com/store/jcomm/

Interestingly NOKIA’s response to the crisis was to essentially terminate business in Japan – after working for 20 years to achieve a 0.3% market share in Japan.

Gerhard Fasol
http://www.eurotechnology.com/
fasol@eurotechnology.com