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New Delhi: The swift uptake of 4G mobile services in India might push 2G mobile handsets out of business in the next two to three years. Out of a total of over 1 billion users, only 400 million own smartphones, i.e. hooked onto high-speed internet. The number of internet users has been growing at a fast pace, as access to data services and 4G enabled handsets became affordable with the entry of new player Reliance Jio.

The remaining 800 million users are still on 2G feature phones, which offer only basic voice and SMS facilities. During January-August period, the 4G-enabled feature phones captured 39% of the overall feature phone market, registering a whopping growth of 5,959% (owing to a low base in the previous year) compared to the same period in previous year, according to data from Counterpoint Research.

In the same period, 2G phones saw a decline of 13 % and now account for 61% of the total handset market. Prabhu Ram, an analyst with Cyber Media Group, says, “The 2G pie is decreasing and expected to decline gradually over the next two-three years.”

The growth in number of internet users was also bolstered by the launch of Jio Phone, a 4G-enabled feature phone at low cost. Reliance’s Jio phone is driving 99% of the 4G feature phone market and rest of the market is distributed amongst Lava, Micromax and Intex, Karn Chauhan, an analyst from Counterpoint Research said.

Jio phone is winning the customers with its attractive offerings in prepaid as well as in postpaid channels which provide free calling and the cheapest data packs to users. To get onboard more customers, JioPhone has also strengthened its operating system (KaiOS) with the addition of popular apps such as Facebook, YouTube and WhatsApp, he said.

Airtel has recently announced a cashback of Rs 2,000 for upgrading to a 4G new smartphone. It has tie-ups with many handset manufacturers for offering 4G phones across varied price range but does not plan to venture into 4G feature phones as the focus is on high average revenue per user (Arpu), according to people aware of the development.

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It is pertinent to mention here that all 2G users are low ARPU users. Jio phone is highly subsidised, according to many experts, and no other handset maker is willing to go high scale with 4G feature phone because of the economies of scale.

The current market conditions make it difficult for mobile handset brands to venture into 4G feature phones, except a few, like HMD and Lava. To counter the pricing of Jio phones, mobile handset brands require economies of scale with adequate support from telecom service providers which is not the case currently, Ram said.

Currently, the only silver lining is increased data usage following the onset of 4G services, resulting in telecom players expanding their 4G coverage.

The swift uptake of 4G mobile services in India might push 2G mobile handsets out of business in the next two to three years. Out of a total of over 1 billion users, only 400 million own smartphones, i.e. hooked onto high-speed internet.


Do you have a feature phone? Beware! This terrible fate awaits!

With the Supreme Court (SC) clearing the decks for an implementation of Telecom Regulatory Authority of India’s (Trai) new tariff order for the broadcasting sector, the prices for consumers to watch TV are expected to come down.

“We expect tariffs to come down substantially. There will be a fundamental shift in the entire framework bringing down the prices for TV consumers, who will now be able to subscribe to what they want rather than being forced to subscribe to a bundled package or what they don’t want,” Trai chairman R S Sharma told DNA Money.

“The SC order is a historic judgement. It will usher in transparency. It is a win for transparency and win for TV consumer’s choice,” he said.

As per the new tariff order by Trai, 100 free-to-air channels have to be offered at Rs 130 per month (excluding taxes) and rest a-la-carte.

The maximum retail price (MRP) of all the channels have to be clearly mentioned in the electronic programming guide and users can subscribe to the channels they want.It also mandates broadcasters to specify reference interconnect offer (RIO) detailing price, other terms and conditions to permit interconnection of another carrier to its network.

It is learnt that only Star India has not filed its RIO as it had challenged the Trai’s order in the apex court.

Under the new rules, a broadcaster cannot discriminate against any distributor and RIO offer has to be uniform to all distributors.

These rules apply to all broadcasting sectors, including direct-to-home (DTH) segment, cable industry and Internet Protocol television (IPTV).

This will also reduce litigations in the sector as most the issues are related to interconnect agreements between stakeholders, Sharma said.

The new tariff order by Trai mandates broadcasters to declare the MRP within 60 days and distribution platform operators to declare network capacity fee and distribution retail price (DRP) within 180 days.

“We have clearly prescribed timelines in the tariff order; there were benchmarks/milestones which were mentioned,” he said.

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“It was implemented, but not in the spirit of the order, as many broadcasters were uncertain about the outcome of the SC case,” he said, adding, “Now, that the SC has provided finality to it, the order will become operational in the true sense.”

Source: DNA Money

The maximum retail price (MRP) of all the channels have to be clearly mentioned in the electronic programming guide and users can subscribe to the channels they want.It also mandates broadcasters to specify reference interconnect offer (RIO) detailing price, other terms and conditions to permit interconnection of another carrier to its network.


Trai's new tariff order for broadcasting sector will lessen monthly TV bill 

New Delhi: Ford India, the domestic arm of the US-based carmaker, plans to raise local content in its products to over 90% in future. The company, which has two manufacturing plants in the country - at Chennai in Tamil Nadu and Sanand (Gujarat), has increased localisation from 60-70% in 2013 to 85% now.

“Electronics and transmissions are a big component, it’s still not localised. The ability to get right technology at right price is still limited. But in future, who knows? We have been able to bring down costs because of increased localisation,” Ford India president and managing director Anurag Mehrotra told DNA Money.

The carmaker, in 2013, created a roadmap to enhance localisation. “There is a roadmap even now to go further to beyond 90%, which is our goal. With the right set of consumer insights, a right understanding of what features consumers want and at what price point, localisation can be pushed to much higher levels”, he added.

However, Mehrotra could not give a timeline for reaching 90% goal. “It is a journey,” he said.Talking on strategy for the Indian market, Mehrotra said, “The starting point is our strategy based on four pillars — strong brand, right product, competitive cost and effective scale.

One of the tenets is right product, the question which we ask ourselves every time is where to play and how to win. Playing for the sake of playing is not relevant.”

For the financial year ended March 2018, Ford India’s revenues, including exports, stood at about $4 billion. Domestic revenues crossed $1 billion for the first time last fiscal and the topline has been growing in the range of 15-20% a year in the last two years.

The company signed an agreement with Mahindra &amp; Mahindra earlier this year to work together in areas including products, electrification, connected cars, mobility solutions, development of two SUVs and an electric vehicle. We will share updates soon from this partnership, he said.

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Though the festive sales for the auto industry started on a sombre note because of floods in Kerala, the company is hopeful of a good season around Diwali and New Year despite the rising fuel prices. “Pent-up demand won’t be impacted by petrol and diesel prices as people look for fuel economy and other factors,” he said.

“The start of the festive season was low key but October, November are the biggest months. Consumers will come and buy, the product timings have to be right. We also have to keep in mind that the auto industry India is growing at 9-10% rate, which is faster than most of the markets and expected to grow 10-12% next year,” Mehrotra added.

Ford India, the domestic arm of the US-based carmaker, plans to raise local content in its products to over 90% in future. The company, which has two manufacturing plants in the country - at Chennai in Tamil Nadu and Sanand (Gujarat), has increased localisation from 60-70% in 2013 to 85% now.


Ford India has been able to bring down costs because of increased localisation, says Anurag Mehrotra

With the demand for electronics hardware expected to reach $400 billion by 2023-24, the government is pushing for domestic manufacturing of electronics hardware with value addition. To promote manufacturing and design in the electronics segment, the ministry of electronics and IT on Wednesday released the draft of the new electronics policy 2018, which will replace the earlier policy unveiled in 2012.

“India cannot afford to bear a huge foreign exchange outgo on the import of electronics alone. Therefore, promoting domestic electronics hardware manufacturing, with high-value addition, is of critical importance,” the draft said. The policy has a big focus on export promotion.

It plans to provide an attractive package of incentives for promotion of the indigenisation and export of electronics, allowing Indian Electronic System Design &amp; Manufacturing (ESDM) exporters by facilitating global market access, entering into Free Trade Agreements (FTAs) with economies such as the EU, Africa and South America.

DNA Money in May this year had reported that the new electronics policy will focus on making India an export hub. 
The global electronics production is estimated to be $1,740 billion in 2017, growing at a compound annual growth rate (CAGR) of 5%. Indian electronics hardware production has increased to about Rs 3,87,525 crore in 2017-18 from Rs 1,90,366 crore in 2014-15, registering a CAGR of 26.7%, as against a growth rate of 5.5% in 2014-15.

India’s share in the global hardware electronics production is 3.4%. The share of domestic electronics production in India’s GDP is 2.3% and the import of electronic goods stood at $53 billion in 2017-18.

The aim is to promote domestic manufacturing in the entire value-chain of ESDM for economic development to achieve a turnover of $400 billion by 2025, which will include targeted production of 1 billion mobile handsets by 2025, valued at $190 billion (around Rs13 lakh crore), including 600 million mobile handsets valued at $110 billion (around Rs 7 lakh crore) for export.

The draft policy also talks about replacing Modified Special Incentive Package Scheme(M-SIPS) with schemes that are easier to implement such as interest subsidy and credit default guarantee to encourage new units and expansion of existing units in the electronics manufacturing sector. DNA Money had earlier reported this.

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Under the new policy, the government will also provide support for infrastructure development through the formulation of a new scheme or suitable modifications in the existing Electronics Manufacturing Clusters (EMC) scheme, for supporting both Greenfield and Brownfield manufacturing clusters.

Source: DNA Money

It plans to provide an attractive package of incentives for promotion of the indigenisation and export of electronics, allowing Indian Electronic System Design &amp; Manufacturing (ESDM) exporters by facilitating global market access, entering into Free Trade Agreements (FTAs) with economies such as the EU, Africa and South America.


This is what Modi govt is doing to beat foreign exchange crisis 

Chinese mobile brands Xiaomi, Vivo, Oppo have been steadily gaining their cumulative market share in the Indian market. Together, the Chinese firms have pushed Indian brands into oblivion. In an interview with Mansi Taneja, Vivo’s director -- brand strategy Nipun Marya says the company is focused on innovation and plans to expand its manufacturing base in India.

The mobile handset market is seeing aggressive competition. What will be your USP in such a crowded market? 
There is competition, but the market opportunity is also very big. The market is so lucrative that we believe we have a great opportunity to create a brand. But, we are not looking at short-term gains and thinking about how we can capture a good market share. For us, it is important to put the right inputs on the ground, right output will follow. We have seen that in China and in other markets.

We have been focused on innovations. For example, we were the first one to make a product with in-display fingerprint sensor technology, retractable front camera, etc. Being in the technology business, innovation is our bedrock and innovation is what we have to strive for if we have to do well in this category. We see a great repurchase of our product. If people have used Vivo they come back to buy a Vivo again. We are understanding the Indian market and hope we will do even better in the future.

What are your plans on manufacturing in India? 
We have a manufacturing plant in Greater Noida. We have invested around Rs 300 crore over the last 2-3 years. The products we are selling in India are being made out of the Greater Noida factory only. Some components come from China, the rest are all manufactured here.

Any plans for exporting mobile phones from India? And what plans of expansion for manufacturing? 
We are seeing good domestic demand currently. As and when we see a need, we will also export from here. The existing plant is fully utilised. We are planning to expand in the near future. When and where that is still under discussion. We are planning to expand in near future and exploring both the options -- expanding current plant or setting up a new one.&nbsp;

You have products across whole price range, but what is the focus segment? 
Our entry level phone is at around Rs 8000 and we go up to Rs 45000. From a demographic point of view, around 70 to 80% of the market is in the 18-34-year-old. We are focusing on millennials as it is the bulk of the market. On the price band side, we want to serve the Indian consumers in the best possible way. We believe the market is attractive at Rs 8,000-10,000 price point, as well as at the Rs 40,000 range. Different segments of consumers have different things which excite them and our purpose is to serve consumers accordingly. 
As per GSK, around 40% of the market is in the top 12-14 cities and the remaining market is in Tier-II, III cities. Since we are an all-price-range player, our distribution is spread across, and accordingly, we decide which products require what kind of distribution and outlets reach.

What is your strategy for sales -- offline or online? 
Whether it is online or offline, these are channels to serve the consumer. There are some consumers who care more about the experience -- touch and feel --of the product. For such consumers, we will have an adequate offline presence. Then, there is another set of people who look for convenience. For them, online is the way to go and we will be present there too. We have been selling products on Flipkart and Amazon, we also have our own e-store. We will focus on the right product and experience for the consumer.&nbsp;

Where does the India market stand for your company. Is it the fastest growing for Vivo? 
India is the second largest market globally after China for smartphones and is important and large enough. We will have to do well here as well.

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Statistics show you have among the top five brands in India. When do you target to be on number one? 
We believe if we keep doing well in the input, output will follow. It is a long journey.

Source: DNA Money

Chinese mobile brands Xiaomi, Vivo, Oppo have been steadily gaining their cumulative market share in the Indian market. Together, the Chinese firms have pushed Indian brands into oblivion.


Market is attractive at Rs 8,000-10,000 price point, as well as at Rs 40,000 range: Vivo   

New Delhi: It’s bonanza time for consumers. After cheap mobile tariffs, consumers may now enjoy fixed-line broadband services at low tariffs as the entry of Reliance Jio in this segment may expand the market like never before.&nbsp;The statistics show it all. Out of total 400 million broadband users, just 18 million are on fixed-line, though the mobile user base has been steadily going upwards at over 1 billion. The potential in the market is huge and due to various infrastructure issues, the market could not pick up earlier, but will now see frenzied action with the arrival of a new player with big pockets, according to an analyst tracking the sector.

“The next price war will happen in the broadband segment as Reliance Jio start making inroads into this space. Apart from broadband and DTH players, this will impact Bharti Airtel as it is aggressively ramping up its presence in this segment,” the Mumbai-based analyst said requesting anonymity.

Till now, the fixed-line broadband market is dominated by state-run telecom player BSNL with 9.24 million users followed by largest mobile player Bharti Airtel with 2.19 million users. The other companies operating in this space include Den Networks, Hathway, ACT Fibernet, MTNL.

The current fixed line broadband subscriber base at 18 million translates into a penetration of 6.5% of the total households in India, according to research firm IDFC Securities. However, in the US and China, fixed broadband homes as a percentage of pay-TV homes exceeds 98% and in India this number stood at just 14% as of calendar 2017.

Many experts feel Reliance Jio will follow the same strategy as that of telecom where it entered the market with free services initially. “The pricing of Jio is expected to be extremely competitive and initial three to six months could be completely free just like the wireless service launch,” an IDFC securities report said.

“An entry price point of Rs 500 (for basic broadband service) could lead to massive penetration and this price could be increased as more value added services (such as TV, video calling, etc.) are provided on top of this. The price point of Rs 500 would be far lower than the average Arpu of larger MSOs and also lower than their entry packs.”

Called Jio GigaFiber, the fixed line broadband for homes and enterprise service will be available across 1,100 cities, Reliance Industries chairman Mukesh Ambani said at the company’s Annual General Meeting last week. The trials for service are already going on and the target is to reach 50 million homes. 
A senior BSNL official said the company has already announced attractive offers for its broadband users and the impact won’t be immediate. “We will be very competitive in the broadband space as well. We matched offers given by RJio and even came out with low tariff plans for our mobile users. “Earlier this month, BSNL introduced a Rs 491 broadband plan with 20Mbps speed, 20GB per day to take on its competitors. 
Besides mobile, Airtel has been quite aggressive in the broadband space as well. It has launched its V Fiber and FTTH based broadband services in few cities already and is expanding aggressively.

The announcement of Jio GigaFiber will also be a serious competition for TV distributors on both the DTH and cable side and is likely to put further pressures on already falling Arpus once the service is launched. Amongst DTH players, it represents more of a threat for Tata Sky which dominates urban markets than Dish TV, which is stronger in rural areas, according to a research note by Credit Suisse said.

RJio has plans to launch various applications for its broadband offering — smart home appliances, video calling via TV. Besides, the launch of Jio GigaTV was also announced, which is an internet connected 4K UHD set-top box allowing users access to JioTV, JioCinema and also other features such as JioSmartLiving. There is no fixed launch date, but registrations will start from August 15

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India has been ranked quite low at 134th in the global ranking for fixed broadband and poor fixed line infrastructure has been a key reason for this. About 80% of data consumption happens indoors through fixed line in homes, in offices and other premises. The fibre to the home (FTTH) service will enable the fibre to reach directly homes/enterprises. Till now, optical fibre reached the premises of the buildings while last mile connectivity is done through copper cable which makes network speeds slower at times.

Source: DNA Money

Out of total 400 million broadband users, just 18 million are on fixed-line, though the mobile user base has been steadily going upwards at over 1 billion. The potential in the market is huge and due to various infrastructure issues, the market could not pick up earlier, but will now see frenzied action with the arrival of a new player with big pockets, according to an analyst tracking the sector.


Good news! Broadband prices set to fall as Reliance Jio, Airtel, BSNL battle for supremacy

The customer will be the primary focus of the recommendations of Telecom Regulatory Authority of India (Trai) on data privacy, security and ownership of data, which are expected to be out in a few weeks.

“The primary emphasis is on customer’s data. Customer is the king of his own data. The data use should be limited to the purpose for it has been given. He/she should have all the rights on who will use their data and how, if they want to delete their data, they should be able to delete it. In case, data is used somewhere, the customer’s permission should be mandatory,” a senior official from Trai told DNA Money.

The recommendations on the issue is expected to be out in a few weeks, the official said. The final recommendations will not only be applicable to telecom sector but will also include other sectors.

Trai had come out with a consultation paper on privacy, security and ownership of the data in the telecom sector in August last year. Trai is in the midst of finalising its views.

According to the consultation paper, about 90% of the data in the world today has been created in the last two years alone with new data being added to this pool at the rate of approximately 2.5 quintillion bytes of data every day. Trai had said while recognising the vast business and efficiency potential of data analytics, it is also vital to assess whether the data protection rights of individuals are being adequately protected in this changing environment.

“Data is not a perishable commodity. We have to make sure that it is protected well and not misused,” the official said.

Trai is also likely to recommend a framework to the government on how to prevent misuse of the data and if it is misused, what mechanism a customer can follow to get a redressal.

Currently, data is being shared with various sectors including banks, airlines, credit card companies and others. But the question here is why should anybody know where one is spending money? Or where one is going unless there is a proper authorisation, asked the official.

Trai had earlier noted that many mobile applications seek access to subscriber data such as call records, access to microphone, pictures, SMS and the likes which may not be required for providing the service desired by the user, and had even flagged the one-sided nature of these arrangements with an uneven bargaining power between the provider and the user.

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Simultaneously, a committee under former justice B N Srikrishna is formulating a data protection law and the first draft is expected to be out soon. Trai’s views might be taken as inputs to the committee’s report. The committee was constituted last year and had come out with a white paper seeking stakeholders’ views.

The issue of data privacy and protection again came to the limelight with recent leak of the Facebook users data including in India.

Source: DNA India

The customer will be the primary focus of the recommendations of Telecom Regulatory Authority of India (Trai) on data privacy, security and ownership of data, which are expected to be out in a few weeks.

&nbsp;


Mansi Taneja