Indian Operators Battle Brutal Market

The broad consensus is that this bruising battle is likely to continue  for the next 18-24 months and broadly cost $2-3 bn per operator before we start seeing consolidation

January 22, 2010 | Ray Le Maistre, Unstrung

The impact of India's brutal mobile services price war is starting to tell on the operators' financial performance, with market leader Bharti Airtel Ltd. and IDEA Cellular Ltd. the first to report their financials for the final three months of 2009.

Bharti's ARPU feels the heat

Bharti Airtel today announced a 1 percent year-on-year increase in revenues to 97.7 billion Indian rupees (US$2.1 billion) for its fiscal third quarter (October to December 2009), and a 2 percent rise in net income to INR22.1 billion ($478 million), despite having tens of millions more customers than it did a year ago.

At the end of December, Bharti Airtel had: 118.9 million mobile customers in India, giving it a market share of 22.7 percent, up 39 percent from 85.6 million a year earlier; nearly 3 million fixed-line customers, up from 2.6 million a year earlier; and just over 2 million digital TV service subscribers, up from 149,000 at the end of 2008.

The impact of intense competition and price erosion is clear to see in Bharti Airtel's average revenue per user (ARPU) numbers for its mobile business, which dipped by 29 percent to INR230 ($4.98) per month from INR324 ($7) a year ago.

The operator's Chairman and Managing Director, Sunil Bharti Mittal, noted that Airtel "continues to ensure a robust market share despite the hyper competition."

Now the carrier, which has just struck a content delivery network (CDN) deal with Limelight Networks Inc. in an effort to attract more media sector and enterprise business, is looking overseas for growth and may even announce an IPO for its mobile towers business, Bharti Infratel, during the next financial year, according to The Hindu Business Line.

Mixed fortunes for Idea

Idea Cellular, India's fifth largest mobile operator, saw its revenues and subscriber base grow year-on-year but its profits and ARPU dip.

The operator reported revenues of INR31.5 billion ($681 million) during the final three months of 2009, up from INR27.3 billion ($591 million) a year earlier, while its customer base (including Spice Telecom ) grew to 57.65 million customers (52.3 million at Idea, 5.35 million at Spice) by the end of last year, up from 38 million at the end of 2008.


But, like Bharti Airtel, it saw a dramatic dip in the amount of money its customers spent each month. The ARPU level at Idea Cellular dipped to INR200 ($4.32) from INR268 ($5.79), and dropped at Spice to INR214 ($4.62) from INR284 ($6.14) a year earlier. It also reported an increase in taxes and operational costs (as it launched its services into five new circles), sending its profit after tax down to INR1.7 billion ($36.7 million) from INR2.2 billion ($47.5 million) a year earlier.

The operator noted in its earnings report that "the Indian telecom market, with already the world’s lowest tariffs, witnessed savage competitive price cuts" during 2009, but added that now that its network rollout is all but complete -- it is operational in 20 of India's 22 circles -- "the peak funding period for 2G operations is now behind... [The balance sheet] provides a solid base to support future investment and any level of competitive pressure going forward."

Search is getting more social

Google's new Social Search service is very interesting. While searching, it enables people to also search through information shared by their contacts, but in order to get this to work, you have to provide Google with details about the people you know by encouraging people to create Google accounts and adding them to your contacts, if not done so already, and then labeling them as "Friends", "Family" or "Coworkers." So over time, Google will know a lot more about us and our social graph.

The Social Search service will allow users to discover what folks they know are saying about a particular topic, either on Twitter, Facebook, blogs, or other social media services. The theory is that opinions of/information from people you know is more valuable and trusted than general chatter which a plain search throws up.

In the endeavour to know more about us Google already knows the what, where, when, & now they'll know the who.

Mr. Zuckerberg are you watching !

Google Blog

1/27/2010

Late last year we released the Social Search experiment to make search more personal with relevant web content from your friends and online contacts. We were excited by the number of people who chose to try it out, and today Social Search is available to everyone in beta on google.com.

We've been having a lot of fun with Social Search. It's baby season here on our team — two of us just had little ones, and a third is on the way. We're all getting ready to be parents for the first time and we have lots of questions. So, what do we do? We search Google, of course! With Social Search, when we search for [baby sleep patterns], [swaddling] or [best cribs], not only do we get the usual websites with expert opinions, we also find relevant pages from our friends and contacts. For example, if one of my friends has written a blog where he talks about a great baby shop he found in Mountain View, this might appear in my social results. I could probably find other reviews, but my friend's blog is more relevant because I know and trust the author.

While we've been enjoying Social Search (and having babies), we've been hard at work on new features. For example, we've added social to Google Images. Now when you're doing a search on Images, you may start seeing pictures from people in your social circle. These are pictures that your friends and other contacts have published publicly to the web on photo-sharing sites like Picasa Web Albums and Flickr. Just like the other social results, social image results appear under a special heading called "Results from your social circle." Here's what it looks like:
Looking at the screenshot, you may notice two new links for "My social circle" and "My social content." These links will take you to a new interface we've added where you can see the connections and content behind your social results. Clicking on "My social circle" shows your extended network of online contacts and how you're connected.


Clicking on "My social content" lists your public pages that might appear in other people's social results. This new interface should give you a peek under the hood of how Social Search builds your social circle and connects you with web content from your friends and extended network. You can check out your social circle directly by visiting this link. (Note that it may take some time for the connections and content to update.)

We think there's tremendous potential for social information to improve search, and we're just beginning to scratch the surface. We're leaving a "beta" label on social results because we know there's a lot more we can do. If you want to get the most out of Social Search right away, get started by creating a Google profile, where you can add links to your other public online social services. Check out this short video to learn more:

The new features are rolling out now on google.com in English for all signed-in users, and you should start seeing them in the next few days. Time to socialize!

iPad is really big iPhone, without the phone

Voice via VoIP is a possibility. No multi-tasking support though. Support for a physical keyboard via an external dock. Apple will open up a new section in the App Store to cater to the iPad (though existing apps might work but resolution might be a challenge). eBook reader app is interesting and a formidable challenge for the Kindle's of the world.

Analyst estimation of volumes is around 5 Mn in 2010.

 

iPad is really big iPhone, without the phone

January 28, 2010 Written by James Middleton

iPad is really big iPhone, without the phone

Apple frontman Steve Jobs took to the stage on Wednesday evening to unveil the latest must have gadget created by the Californian purveyor of cool stuff.

It’s a tablet, or a slate, or at least it fits into that form factor category. But in terms of functionality it falls into one of these new niches that the portable computing or MID (mobile internet device) sector seems to keep spawning.

The iPad looks and feels much like a big iPhone, albeit one with a 9.7” LED display. It will be available with either wifi or wifi and 3G connectivity, but it doesn’t support cellular voice. It seems to attack the burgeoning e-reader space, dominated by the likes of Amazon’s Kindle, and the forthcoming Android-based devices that offer more features and functionality, yet it doesn’t support multitasking, at least not with third party apps.

Apple will open up a new section in the App Store to cater to the iPad, although the device is also able to use 140,000 existing iPhone and iPod Touch applications. However, some have noted that once some of these apps scale up to the available resolution of the iPad (1024 by 768 pixels at 132 pixels per inch) they look a bit like the blocky graphics of the Commodore 64.

Taking the e-reader market head on, the iPad will feature an iBooks app that allows users to browse, purchase and download e-books to read on the device. The screen isn’t up to the same standards as electronic ink, but that’s because it’s being pitched as a jack of all trades when teamed with the iWork suite of office tools, Safari browser (with the same lack of support for Flash and Java that the iPhone suffers from), email client, and photo, video and music player apps.

Initial thoughts from David McQueen, principal analyst at Informa Telecoms & Media:

“Bypassing the operator was always on the cards. A 3G connection is not standard on the iPad, it’s an option, and Apple already has a very settled distribution and retail network for its other devices. In fact, Google did the same thing when it launched the Nexus One, although this was only online retail. The thing mobile operators bring to the consumer is the potential for subsidy and another distribution channel.

“For the operators such a device can help with data revenues, reduce churn, provide differentiation and attract new subscriptions. However, the latter is only really possible if there is exclusivity to a particular operator in a market, but as the iPad is an unlocked device this will not be the case, unless there is any first mover advantage, such as T-Mobile US and the Nexus One.”

Jobs took a pop at the netbook segment as nothing but a cheap laptop form factor, but it the iPad also seems to have designs on this sector. Accessories for the device include a full keyboard dock and a connector to transfer files from a camera – it doesn’t feature an integrated camera.

The wifi only model will start shipping in late March, costing an almost Kindle DX busting $499 for the 16GB model, $599 for the 32GB model, and $699 for the 64GB model. The wifi and 3G models will be available in April for $629 for the 16GB model, $729for the 32GB model and $829 for the 64GB model, although users will then need to buy a data plan from AT&T or the as yet unannounced international carriers.

Cellular voice is missing but an interesting development in the iPhone SDK was revealed this week that may pave the way for VoIP on the device. Application developer iCall said that the iPhone SDK has been updated to allow VoIP calling from the device over 3G networks. iCall now has a 3G VoIP application available for the iPhone and Google Voice is now expected to be allowed onto the handset. Because the iPad can run iPhone apps, it has also been suggested that 3G voice may work on the new gadget.

TA Associates Invests $45M In Micromax

Interesting to see PE investments now in handset distribution in India

January 12 2010 | TEAM VCC

http://www.vccircle.com/500/news/ta-associates-invests-45m-in-micromax

Your Name	:
Your Email Address	:
Friend's Name	:
Friend's Email Address	:

The mobile handset maker will deploy the funds to expand its business to Africa and Latin America.

Private equity player TA Associates has concluded its first deal after it set up shop in India last year. The firm, which has backed companies like Idea Cellular Ltd in India, has invested $45 million (Rs 204 crore) in domestic handset maker Micromax Informatics Ltd. Delhi-based Micromax will use the funds to expand its handset business to Africa and Latin America. The firm has international offices in Hong Kong, the US and Dubai.

According to report in Economic Times, TA is picking up a 20% stake in Micromax valuing the company a little above Rs 1,000 crore. “This company has been experiencing phenomenal growth. It is a very product-focussed company,” Naveen Wadehra, the Mumbai-based director of the firm, told VCCircle. Wadhera, who was previously with Goldman Sachs' Asian Special Situations Group, will join the Micromax board of directors.

Micromax is eyeing a turnover of Rs 1,500 crore by the end of this fiscal year and Rs 3,000 crore next fiscal. Micromax started as a telecom equipment distributor in 2000 and entered the mobile handset market in April 2008. The firm has been able to quickly expand its products with its handsets now being sold through more than 45,000 retail points in 120 cities across India. It has become the third largest handset provider in India, as measured by volume, said Micromax in a release, just below Nokia and Samsung in that order.

Micromax announced the launch of Micromax C350, the first Indian Open Market Handset (OMH) for CDMA phones. It also cashed in on the huge success of the QWERTY keypad on a mobile handset that it introduced designed to speed up texting. It also introduced dual SIM technology into India and has also launched a new phone with a mosquito repellent feature in association with MTV. It offers entry level handsets from Rs 1,750 to high-end models up to Rs 16,000. But most of its mobiles are sold in the Rs 2,500-5,000 segment, where it sold 700,000 sets last month, said Wadhera. The company is focusing on Tier II and III cities besides smaller towns and rural areas.
The Indian wireless market is one of the fastest growing in the world with 10 to 15 million new mobile subscribers per month, says research by Macquarie Research and Grant Thornton. The number of subscribers has grown from approximately 100 million in 2006, to more than 400 million today and is expected to grow to over 800 million over the next three years.

Besides Idea Cellular, TA Associates has also invested in GlobeOp Financial Services, a specialist BPO company. On the deal-making side, “telecom and healthcare look particularly exciting going forward”, said Wadhera. The private equity firm recently closed its new $4-billion
fund, TA XI, L.P. The fund is the successor to TA X, a $3.5-billion fund which was closed in March 2006. TA Associates has offices in Menlo Park, London, Boston and now in Mumbai.
Goodwin Procter LLP and Lexygen provided legal counsel to TA Associates. Grant Thornton served as the sole financial advisor to Micromax and INDUS G&D Law provided legal counsel to Micromax.

Hands on with the Nexus One

Reiterates my view of the Google's plan with the NexusOne - Tech demonstrator + testing the waters with an alternate distribution channel beyond the telco ambit

Telecoms.com

The Google Nexus One features Android 2.1

The Nexus One is Google’s first own brand Android device. It also serves as a showcase of what can be done by tightly integrating Google services with the hardware, giving us a glimpse of what the Android platform might be capable of in the future.

Just over a week ago I swapped my iPhone for a Nexus One, full of expectation that a real contender to the iPhone was finally available, and somewhat confident that Google wouldn’t market an own branded smartphone prematurely. But that is exactly what I think it did.

It’s not that the Nexus One is a bad device, far from it. But to use a phrase that keeps cropping up time and time again, it’s just that the iPhone is so much more polished. And speaking as an application developer, it’s not so much the features available on the iPhone; it’s more about how it does things. A few days without Visual Voicemail and multi-touch gestures, and I feel like I’ve regressed a few years in terms of device capabilities.

That said, I’m still raving about the Android/Nexus One/Google’s mobile strategy to anyone who wants to hear. Google has invested time and energy designing a phone that integrates seamlessly with its existing services which ultimately creates a strong user experience.

Developers are the driving force behind these services – something that has really become apparent in the wake of the iPhone’s success. And whilst many have found Apple’s development environment easy to use, it is of course limited to Mac only. Google’s Eclipse/Java approach on the other hand allows one and all to develop and launch an application. In short, the overall application publishing experience for a Google developer is relatively painless. The same is not to be said for developing on the iPhone platform.

Time after time a seemingly chaotic open space gives way to a better ecosystem than a closed shop. Android represents the ability for developers to innovate and drive the platform forwards, whereas the iPhone wants you to do it Apple’s way.

Apple made this mistake before, when pitting the Mac against the PC, before watching the hordes flock to the rival platform. This wasn’t because Microsoft had built a better product but because Windows was an open and innovative environment that encouraged developers worldwide to ‘have a go’.

This same unrestricted environment will eventually result in more Android apps hitting users’ phones. Now if Google can control the amount of bugs on the platform in a nonintrusive manner, then the user will benefit from apps written by developers from all walks of life and not just from the Apple school of thought.

What’s missing from the Nexus One?

Multi Touch

If the iPhone has a trump card, it’s surely multi touch. Despite the fact Android can support the feature, the Nexus One comes crippled (patent restrictions in the US perhaps?). As any parent who has let their child play with the iPhone will testify, Apple’s implementation of multi touch is perhaps the most intuitive form of interaction ever seen.

Visual Voicemail

Visual Voicemail is a fine example of Apple’s fantastic approach to rethinking an existing solution. It’s a hard concept to explain – messages appear in a list so you can listen to them in any order - but anyone who has experienced visual voicemail knows how much it has revolutionised the approach to voicemail. Pressing 1 for the next message or 3 to delete now seems archaic.

Persistent app bar

Whilst I prefer the Nexus One’s home screen shortcuts and widgets, I miss being able to instantly access my phone, email, messages and web from every menu screen. Calling someone may only be a couple of swipes away on the Nexus One, but it’s pretty frustrating.

App Store

The App Store is where I fell in love with the iPhone. The sheer volume of quality, useful and entertaining apps is astounding and a testament to the iPhone in itself.  Of course the Nexus One has the Android Market app store, but as Android comes in several form factors about half of what I’ve downloaded to the Nexus One to date hasn’t been usable.

Polish

This is probably the most important thing the Nexus One lacks. To put it simply, the iPhone just feels right at every step.  The scrollable tables ‘bounce’ at the top so you know you’re at the top of a list; every item has a visual feedback on click so you know the device is doing what you wanted to do; the finger swipe gestures work in a smooth and consistent fashion to name but a few.

What’s innovative about the Nexus One?

Widgets

Whilst I’ve always found weather displays pretty pointless (just look out of the window), the news widget on the Nexus One is a welcome addition, as is the Google Search bar. It’s a small detail, but one that makes the Nexus One feel more ‘integrated’. I’m look forward to seeing what widgets become available as Android goes further.

Voice Recognition

The cloud-based voice recognition on the Nexus One is a fantastic addition to the device. I’m normally very hesitant when someone mentions voice recognition, but Google has pulled it off. Every text field across the whole of the Nexus One can be used by voice instead of text with surprising accuracy. But the total lack of functionality for this feature when not connected can be painful and I imagine it would negate the whole benefit if I didn’t live in a fairly well connected environment.

Notifications

The Nexus One’s handy notification bar at the top of the screen tells you when you have outstanding emails, calls, voice mails etc. One of my constant gripes about the iPhone was dismissing a popup notification temporarily and then forgetting about it completely, which the Nexus One goes some way towards fixing.

GMail

It took years for me to be persuaded to ditch Outlook for GMail. Now that I have I find it almost impossible to live without threaded conversations, multiple labels per mail etc. Whilst the iPhone can connect to GMail it doesn’t port across the feature set, effectively reducing your GMail experience down to normal email. In contrast the Nexus One does a good job of simulating the desktop GMail experience and further strengthens the case for Google Apps as a business application suite.

Shortcuts

The final Nexus One nice to have is the ability to put shortcuts directly onto the home screen for specific contacts, apps, functions or direct dials. At the moment I’m using it as nothing more than a ‘super favourites’ area on the home screen, but even that makes it worthwhile.

Overall, there is no doubt that the iPhone has an edge over the Nexus One. Not in every way, but certainly in ways that count. Users of Google Voice or Google Apps may be willing to sacrifice the polish of the iPhone for a more Google centric experience, but by and large the iPhone is the better mobile device.

Globespan Capital Leads SMS GupShup's $12M Round

Interesting biz model though scalable and sustainable monetization remain to be proven given little propensity to pay and the increasing number of players in the segment

 

January 20 2010, Sarimul Islam Choudhury, VCCircle

http://www.vccircle.com/500/news/globespan-capital-leads-sms-gupshups-12m-round

Your Name	:
Your Email Address	:
Friend's Name	:
Friend's Email Address	:

US-based Globespan has made its debut India investment in SMS GupShup, which has raised $37 million in four VC rounds. 

SMS GupShup, a mobile group SMS service platform, has raised $12 million in Series D round led by venture capital firm US-based Globespan Capital Partners. The existing investors Charles River Ventures and Helion Venture Partners have also participated in this round.

The company plans to utilise the funding for global expansion, starting with emerging markets that have a high mobile adoption, said a company statement. Apart from expanding into new territories, it also plans to roll out new features such as mobile CRM solutions for small businesses and corporate brands.

Venky Ganesan, managing director of Globespan Capital Partners, will join the SMS GupShup board.  Globespan has over $1 billion under management and invests in information technology and cleantech companies. SMS GupShup will be its debut investment in India. Globespan has seen a couple of exits in last few months in the US with its portfolio company Quattro Wireless, a mobile ad network, being acquired by Apple. Another one of its firms, VoIP startup Jajah, was acquired by telecom major Telefonica.

SMS GupShup is a mobile group SMS service that allows users to create mobile communities and broadcast messages to them. It is one of the group companies of Webaroo Inc, an offline mobile search service provider in the US.

“We expect to use the proceeds from this funding round to accelerate our growth and expand our operations globally, to make our products useful to each of the 4 billion mobile subscribers worldwide. We see strong interest from carriers worldwide,” Beerud Sheth, co-founder and CEO, SMS GupShup said in the statement.

The company has so far raised $37 million in funding. It has raised $11 million in Series A funding from Helion Ventures and Charles River Ventures (CRV) in 2008. Since its launch in 2007, SMSGupShup has expanded its user base to around 26 million in over 2 million SMS communities in categories ranging from finance, entertainment, business, news, education, spiritual and health. It claims that the company saw 100% growth in user base in the last six months, and accounts for 5% of all text messages sent in India.

A Big-Picture Look at Google, Microsoft, Apple and Yahoo

January 22, 2010

Nick Bilton/The New York Times

 

On Wednesday, I wrote about a battle looming between Apple and Google as discussions take place over the possibility of Apple making Microsoft’s Bing the default search engine on the iPhone.

Stepping back further than a single search engine fight, it’s evident that Google, Microsoft, Apple, and even Yahoo are now competing in numerous different business arenas.

The chart above illustrates many of the services these companies provide. Some of their products have been cornerstone revenue streams, and others are just at the beginning of development. But putting them up against each other really helps illustrate each company’s focus and their possible future directions of exploration.


Google

Although the company started in search and made billions of dollars in search-related advertising, it recently made the move into mobile software and hardware. Google is also moving to the desktop as hardware companies consider using Google’s Android operating system for tablet PCs and netbooks and Google continues developing its own Chrome OS. Google’s recent foray into mobile phones, with the Nexus One, signals a big shift for the company, but the lack of customer service might hinder customer adoption of its mobile products.

Microsoft

Microsoft really competes with everyone. It is on the desktop, in the cloud, on mobile devices, in your living room, answering search queries and navigating you to your favorite restaurant. So what’s next? Although the company invested in Facebook, and it offers some social features on its Xbox platform, it still needs to make a major leap into social networking. Another major gap is mobile phone hardware.

Apple

Apple’s success with Mac personal computers, the iPod, the iPhone and iTunes has allowed it to step back from the fray and avoid competing in search, news, maps and social networks. But the recent competition with Google over mobile phone software might change its attitude. Apple has close to $34 billion in cash and securities, which means that it can afford to make some big purchases in the search market — or any other market for that matter.

A side note: While looking at the comparisons of these four companies, it’s especially interesting to see that Apple is the only one of the four that charges for its online services, including calendar, contact sync and Web mail. Google, Microsoft and Yahoo all provide these cloud-based products free of charge.

Yahoo

Yahoo has not really added any new products or services over the last year, but it seems to do best with content-related products. Yahoo News is still the No. 1 news site, and Flickr continues to grow and remain a highly successful photo Web site. As the race really pushes toward mobile over the next few years, it’s going to be interesting to see how Yahoo decides to play in that space.

Google Is Now A Complete Mobile Company

Audacious to say the least but not unbelievable given their penchant for innovation & disruption. 

I guess this misses out mentioning the AdMob acqusition and the aggressive foray into Mobile Advertising  so as to expand their advertising cash cow and part fund this foray.

Brian Sheehan, The Business Insider

In the past few weeks Google has made three major moves that, taken separately, seem like distinct creative expansions to its search platform. They are just the kind of aggressive new ideas we have come to expect from Google. Taken together, however, they have the potential to be something bigger: a game-changer that gives Google a hammer lock on not only mobile search or telephony, but also on the whole integrated process of consumer mobility.

Consider the moves Google has made in quick succession:

1. It dropped Tele Atlas, the company powering Google Maps' "turn-by-turn" navigation in favor of Google's own system, which it is offering free on the Android phone.
2. It introduced Google Favorite Places, an application based on quick-response (QR) codes that lets people photograph window stickers in local shops or restaurants to get instant reviews and discount coupons.
3. It is launching its own mobile handset, the Nexus One.

Independently, each of these moves has huge potential impact. Free turn-by-turn directions on your phone makes it silly, for example, to buy a separate GPS system for your car - no wonder Google's free navigation announcement drove down the stock prices of Garmin and Tom Tom 16% and 21%, respectively. Google is driving the profit out of the map market because it sees maps as part of something much bigger.

If it remains exclusive and expands consistently, the Google Favorite Places application, which currently lists 100,000 local businesses, could deal a crushing blow to a nascent competitor such as Bing. It could usher in the kind of competitive superiority we saw in the days when Visa outflanked American Express by emphasizing that you had better bring your Visa card because "They don't take American Express." If scanning a code to Google can save you $10 on your dinner while searching on Bing cannot, it's a pretty easy choice regarding your default search engine.

Google's new mobile phone would give Google more control of its users' handset experience. Further, it is a potential end-run around control of handset sales by big mobile carriers. According to a recent article on this site, it could help Google realize an open mobile ecosystem that would be a "viable alternative to how consumers buy their handsets in the U.S."

Looked at together, these three developments are part of a single, comprehensive, integrated vision. This is not just a play by Google to position itself to take advantage of mobile. It is an audacious plan to define the benefits of mobility for consumers, in general, and to completely dominate the space that they help consumers create.

Google is creating a network of integrated mobile functions that will be centrally controlled and integrated to a degree that will make the revolutionary, symbiotic iPhone/iTunes product seem quaint in comparison. The beauty of iPod/iTunes is that they depend on each other and they support the other's benefits. Once a consumer commits to them, the iPod and iTunes are impossible to unbundle. They can be replaced by other products, but not efficiently.

Now imagine this (it's not hard): Google is your go-to source for almost all of your interdependent needs when you are out and about, not just mobile phone needs, but "mobility" needs. It's the device you use, the search engine that helps you find things, the map that tells you how to get there and the coupon you use to get a discount at a preferred restaurant or local shop, all in one seamless experience.

While other companies are trying to own key aspects of mobile telephony to take advantage of the next big growth spurt, Google is trying to dominate the whole thing by helping consumers re-imagine what being mobile is all about, and by offering a web of interdependent products with outstanding combined benefits. Oh, and most of them are free.

Recently, the blog abovethecrowd.com described Google's strategy as true disruption: "[It] change[s] the rules of the game in such a way that the incumbent would need to abandon or destroy its core business in order to lay chase to your strategy." Google is using that strategy effectively against a number of established business models simultaneously.

A key aspect of that disruption is what has been termed the "less than free" business model. Less than free means, for example, that Google is willing to give handset manufacturers ad splits for using the Android Smartphone OS. In effect, they are paying them to use it.

Is it too far fetched to think that someday Google will become its own telecommunications carrier, providing internet connectivity and mobile connectivity for, you guessed it, free?
Probably not.

The good news for our industry is that the money fueling Google's vision comes from a familiar place: good old advertising. Advertising is the only model since the industrial revolution that has consistently created communications, lifestyle and entertainment benefits for consumers for free.
As we go into the next decade, advertising is alive and well. Google is betting its future on it.

Google phone's first week box office goes ker-klunk

In my view Google launched the Nexus One on the following counts :

·         Technology demonstrator so as to highlight the possibilities with the platform given the right hardware with the objective of gaining on the traction Android is starting to gain so as to broaden the ecosystem

·         Explore the extent to which they can challenge the current Operator Biz Model -

o   To evaluate the viability of an alternate sales channel (the Online sales channel) in operator controlled markets and gauge the traction they can gain via the same – Keep in mind Google has also offered to retail other manufacturer Android phones via their portal with Motorola being the first vendor agreeing to offer their [products via the same

o   Explore the boundaries and traction they can gain with VoIP (and relegate operators to pipes) given that Google Voice is tightly integrated with Android in the Nexus One and in effect a user can also assign a VoIP number to his mobile phone (02 purchase of leading VoIP player Jajah recently is the beginning of this acknowledgement and an endeavor to blunt the impact)

o   Evaluate possibilities of reverse bundling wherein operators tie-up with Google to offer a data bundle with the unlocked handset

Audacious to say the least given the fact that even Apple (this is debatable given that Apple gets an incentive on each activation and a portion of the data revenues from AT&T) and RIM have succumbed to the pressure of operators in the US and other operator controlled markets.

Jury still very much out on whether Google will succeed in this endeavour and the first week of sales don’t look encouraging !

By Ian Scales. TelecomTV One , 18 January 2010

All the 'will they? won't they?' excitement over the launch of the Google's Nexus One Android smartphone has only resulted in sales of 20,000 units in the first week in the US, according to industry estimates.

As we've pointed out before, US phone launches are now followed as if they were movies. Observers are apt to talk about first weekend sales and on this basis the Nexus One has apparently turned out to be an art house movie rather than a blockbuster.

The figures comes from Flurry which says it monitors usage of more than 10,000 developers' applications on iPhone and Android platforms. It claims to track the apps on 80 per cent of the iPhone and Android handsets in the market, and it says that its dashboards show that the Nexus One has had a lack-luster first few days in comparison with the surges of activity it tends to get from other phone launches, such as theiPhone 3GS.

On that comparitive basis it reckons that Google has sold about 20,000 handsets from its web site, which is not only far less than the usual sales records these days, but also lower than competing Android-based handsets. 
Direct comparison, as Flurry points out, is difficult since Google has done no marketing and promotion, is making the Nexus available in the US only, and has (as yet) no shop-front sales via carrier partners. And, one might add that a web-site sales process inevitably slows the sale-to-unboxing cycle since the user has to wait a few days for delivery.

There are also reports that Google is not making a great fist of the retail process with potential users finding it difficult to make a purchase and then get support, even if they are keen to pony up the over US$500 price tag.

In fact the whole Google Nexus One launch episode is strange. The question: 'why launch a phone when up to now the company has always said that it wasn't in the phone business' is still unanswered. It appears that Google isn't quite sure itself: probably the real answer is something to do with momentum. Google likely reached a stage where it was easier to launch a phone of its own for a variety of small reasons - searching for a big reason is therefore fruitless as there isn't one.

There is undoubtedly a lot to be learnt internally by launching a Google phone - Google has, after all, put mobile Internet right at the core of its strategy and putting its own skin in the Android game is probably useful on many levels. And of course Google still has many options in terms of retail strategies, applications and tie-ins. The Nexus One is likely to be a slow burn.

But there has been good news too for Google on the Android front: South Korea's SK Telecom has made the sort of announcement Google executives no doubt dream about. Korea's largest mobile carrier, stung by its competitor's iPhone sales has just announced the launch of 15 new smartphones - up to 13 of these models will be Android.

Ha Sung-min, president of SK Telecom's mobile network operator unit, said in a press conference in Seoul last week: "We will have 25 smartphone line-ups in 2013, or 40 percent of our total handset offerings, mostly equipped with the Google OS."

Regards,

Navdeep

Report: Mobile Internet Yet to Take Off in India

Comments in my previous post hold. 

The one big challenge for mobile internet currently is spectrum availability (currently a huge challenge in India) and there doesn't seem any respite on this count currently visible as you still have the new players who have paid up license fee also waiting to be allocated spectrum and the only remaining spectrum is the one to be vacated by Defence.

January 6, 2010 | Gagandeep Kaur, Unstrung

Despite the large number of mobile phone users in India -- there are now more than 500 million -- only a fraction are using their mobile devices to access Internet services on a regular basis, according to a new study published by the Internet & Mobile Association of India (IAMAI) .

Although 127 million Indian mobile users have devices that are Internet-ready, only 12 million have accessed the Internet using their handsets during the past year, and only 2 million use mobile Internet services at least once a month, according to research conducted for the IAMAI by market research firm IMRB International.
Not surprisingly, the main users of mobile Internet services in India are young people. College students and young men aged between 18 and 35 account for 35 percent and 33 percent of those active users respectively, while schoolchildren account for a further 11 percent.
During the past few months, Indian operators have launched many services targeting the youth market.
Bharti Airtel Ltd., the largest operator in India with a subscriber base of 116 million at the end of November 2009, launched a Twitter Inc. service for its subscribers last October. The operator recently published the results of its own mobile usage survey.


Aircel Ltd. , which has a subscriber base of around 30 million, launched its Pocket Internet service early in 2009 with the youth segment as its main target. The company also plans to launch India’s first mobile applications store in association with Infosys Technologies Ltd.

Of the mobile Internet services being consumed by the 2 million regular users, communications applications, such as social networking, blogging, and packet voice services, are the most popular, with about 60 percent using such services. E-commerce services such as paying bills and buying travel tickets are used by only 2 percent of regular mobile Internet users, while mobile banking is unpopular because of fraud concerns.

The biggest impediment to mobile Internet usage growth in India is the high cost of data usage. However, the operators now realize there is pent-up demand, and are starting to offer more affordable tariffs. Sistema Shyam TeleServices Ltd. , which markets its services under the MTS India brand, in November launched its prepaid mobile data service Mblaze, which offers downstream speeds of up to 3.1 Mbit/s, free access to Websites such as Yahoo and Wikipedia, and a tariff of just 10 paise (less than 1 U.S. cent) per megabyte of data downloaded.

2 million serious Mobile Internet users in India

While this number is nothing to write home about the opportunity is huge on the following broad counts :

* Data penetration currently marginal

* PC and fixed internet penetration is marginal so the first experience of the internet for many will be via the mobile phone

* With the operators battling it out on voice, VAS would increasingly be focused upon

* India has very favourable demographics - The youngest population in the world with an avg. age of 26

* 77+ Mn English speaking folks (so no issue of content not being available in local language being a starting barrier)

Press Release
Internet & Mobile Association of India (IAMAI)

Tue, 05 Jan 2010

New Delhi, December 31, 2009: In a study released by IAMAI and IMRB it has been found out that there are only about 2 million users accessing Internet through their mobile phones and other mobile devices on an active basis, which means they use Internet on their Mobile at least once a month.

The study further states that there are closed to 127 million mobile subscribers effectively 27%, out of the total subscriber base of 471 million whose mobile devices are internet ready. Of these 127 million subscribers, only 9.4% i.e. 12 Million users have used Internet over their mobile phones ever in this year (at least once in last one year). This number further reduces down to 2 million or 17% when it comes to active users. (Source: TRAI report as of Sep 2009)

The report further highlights that nearly 70 % of these users are College going kids and young men which fall into the age group of 18-35 years, which incidentally constitutes the major chunk of active Internet user base in India.

The study, however, also reveals that Online communication happens to be the major application in the vogue (this will entail chatting, accessing the Social networking sites and M-blogging), 60% users who are accessing Internet through mobile will account for this. This is closely followed by Information search which stand at 23% of the total Active users.

Aircel offloads Indian cell towers

Values each tower at around US$100k

James Middleton, Telecoms.com

January 14, 2010 

 

Aircel sells towers to GTL for $1.84bn

Indian communications infrastructure operator GTL Infrastructure is to take over the tower assets of local carrier Aircel in a deal valued at $1.84bn.

Under the agreement, GTL will take over 17,500 existing towers and will take over rights to roll out 20,000 more.

Aircel’s move is expected to be replicated by other operators across the Indian mobile industry as they attempt to drum up funds to participate the country’s forthcoming auction of 3G spectrum. The latest official date given for the auction is for this month, but after numerous delays this may be postponed yet again.

It seems Aircel’s plans to capitalise on 3G data services are already underway. Last week the operator tapped up application services firm Infosys to build it an application store catering to Aircel’s almost 30 million mobile subscribers.

Infosys will use its white label app store platform Flypp to power the shop front, which will host mobile applications drawn from an Infosys-managed ecosystem of independent software vendors.

But until 3G penetration becomes significant, it’s unlikely that the types of applications in Aircel’s store will be anything like those now common to the iPhone and Android app stores, seeing as all of Aircel’s subscribers are currently equipped with 2G GSM handsets and generate a monthly ARPU of $2.36 according to Informa’s WCIS database. Instead we can expect to see mobile money and SMS-based m-payment applications, which are already driving data revenues in the emerging markets.