Vibrant wireless India… incorporating various developing technology (December 2004)
Now comes a different business model!!!
Wireless telecommunications is one of the few technological areas where India is very closely watching the dynamism around the world and is gradually reducing the lag time to embrace various new developments happening in its tech savvy peers. India is walking hand in hand with its emerging partners like China, Brazil, Mexico, Russia etc. and sometimes even overtook them and came closer to the big daddy US and Europe ahead of its peers. Agreed that with a mere 5% wireless penetration, India is largely dwarfed by its peers’ rate of around 30-40% or even more, hence it has to still pull up its socks to catch them. But leaving beside the penetration story, if we analyse India’s performance in embracing the advanced wireless technology, the conclusion would make every Indian smile and encourage the wireless operators to achieve even more milestones.
India has seen the launch of Push-to-Talk (PTT) service (a Walkie-Talkie feature, once confined to the US), simultaneously or even ahead of its launch in Europe by the biggies like Orange and T-Mobile. While the term is absent in its peer nation, only Mexico’s Telefonica Moviles Mexico has launched the PTT service recently. Tata Teleservices is one of the first CDMA operators outside the US to launch PTT service and also the first wireless operator in the world to commercially launch Qualcomm’s BREW (BREW) Chat solutions while launching its Push to talk service early this year.
The GSM technology has been upgraded to EDGE in India (during early 2004) much faster than its peers, albeit with a few exception like Brazil where Telecom Italia Mobile launched EDGE during 2003 end, while Russia still works on GPRS. The launch of the ‘Ring Back Tone’- a recent buzzword in the wireless world capable of generating worldwide revenues of $4bn by 2006, by the operators like Airtel, Hutch etc. in India coincides with that of the US and Europe in timing. Verizon has launched the service (the first of its kind in the US) during November 2004 and is planning to launch it nationwide by next year, while many operators in Europe are launching the additional revenue generator service.
Now comes in India, another business model in the wireless world - Mobile Virtual Network Operator (MVNO), which is highly successful in the US and Europe. A MVNO is a low cost mobile service provider/operator that does not own its own spectrum and usually does not have its own network infrastructure. They buy wireless minutes from the mobile operators having all the resources, and further sell the wireless minutes to their customers after packaging the same with some other features under their own brand. They have full control over the SIM card, branding, marketing, billing, and customer care operations. Virgin Mobile has been very successful MVNO player, and has become one of the top ten wireless operators in the US within two years of its launch and the fifth largest in the UK. In the US it uses Sprint’s network (a CDMA operator) while in the UK it uses T-Mobile’s network (a GSM operator). It is a kind of win-win situation for both-the provider of network and the MVNO. While the infrastructure provider can earn revenues from their otherwise idle lying infrastructure (inevitable in the wireless industry) without much additional expenses, while the MVNOs save their infrastructure building cost, and deprecation thereon, which runs in billions of dollars. Their main focus remains on the branding and generally they target youths and teens with their life style branding strategy.
Virgin Mobile has shown interest to have its footprint in the booming Indian wireless industry, incorporating the same business model of MVNO. If serious on India, Virgin would go in for a joint venture (the strategy adopted in the US and UK) with the prospective infrastructure provider in India. It might seek the wireless infrastructure from the CDMA players like Reliance Infocomm, Tata Teleservices or GSM players like Airtel or Hutch.
The dynamic wireless India promises to provide world-class communication experience and should this model arrive in India, we can experience a totally different wireless world and all the new form of competition too.
Wireless telecommunications is one of the few technological areas where India is very closely watching the dynamism around the world and is gradually reducing the lag time to embrace various new developments happening in its tech savvy peers. India is walking hand in hand with its emerging partners like China, Brazil, Mexico, Russia etc. and sometimes even overtook them and came closer to the big daddy US and Europe ahead of its peers. Agreed that with a mere 5% wireless penetration, India is largely dwarfed by its peers’ rate of around 30-40% or even more, hence it has to still pull up its socks to catch them. But leaving beside the penetration story, if we analyse India’s performance in embracing the advanced wireless technology, the conclusion would make every Indian smile and encourage the wireless operators to achieve even more milestones.
India has seen the launch of Push-to-Talk (PTT) service (a Walkie-Talkie feature, once confined to the US), simultaneously or even ahead of its launch in Europe by the biggies like Orange and T-Mobile. While the term is absent in its peer nation, only Mexico’s Telefonica Moviles Mexico has launched the PTT service recently. Tata Teleservices is one of the first CDMA operators outside the US to launch PTT service and also the first wireless operator in the world to commercially launch Qualcomm’s BREW (BREW) Chat solutions while launching its Push to talk service early this year.
The GSM technology has been upgraded to EDGE in India (during early 2004) much faster than its peers, albeit with a few exception like Brazil where Telecom Italia Mobile launched EDGE during 2003 end, while Russia still works on GPRS. The launch of the ‘Ring Back Tone’- a recent buzzword in the wireless world capable of generating worldwide revenues of $4bn by 2006, by the operators like Airtel, Hutch etc. in India coincides with that of the US and Europe in timing. Verizon has launched the service (the first of its kind in the US) during November 2004 and is planning to launch it nationwide by next year, while many operators in Europe are launching the additional revenue generator service.
Now comes in India, another business model in the wireless world - Mobile Virtual Network Operator (MVNO), which is highly successful in the US and Europe. A MVNO is a low cost mobile service provider/operator that does not own its own spectrum and usually does not have its own network infrastructure. They buy wireless minutes from the mobile operators having all the resources, and further sell the wireless minutes to their customers after packaging the same with some other features under their own brand. They have full control over the SIM card, branding, marketing, billing, and customer care operations. Virgin Mobile has been very successful MVNO player, and has become one of the top ten wireless operators in the US within two years of its launch and the fifth largest in the UK. In the US it uses Sprint’s network (a CDMA operator) while in the UK it uses T-Mobile’s network (a GSM operator). It is a kind of win-win situation for both-the provider of network and the MVNO. While the infrastructure provider can earn revenues from their otherwise idle lying infrastructure (inevitable in the wireless industry) without much additional expenses, while the MVNOs save their infrastructure building cost, and deprecation thereon, which runs in billions of dollars. Their main focus remains on the branding and generally they target youths and teens with their life style branding strategy.
Virgin Mobile has shown interest to have its footprint in the booming Indian wireless industry, incorporating the same business model of MVNO. If serious on India, Virgin would go in for a joint venture (the strategy adopted in the US and UK) with the prospective infrastructure provider in India. It might seek the wireless infrastructure from the CDMA players like Reliance Infocomm, Tata Teleservices or GSM players like Airtel or Hutch.
The dynamic wireless India promises to provide world-class communication experience and should this model arrive in India, we can experience a totally different wireless world and all the new form of competition too.
posted by Vikas Maheshwari, CFA at 7:25 PM
0 Comments:
Post a Comment
<< Home