BSNL Tries Free Dialup For 2 Months To Popularize Internet Usage; Why Dialup?

At at time when their focus really should be in addressing the decline in wireline connections and meeting their broadband rollout targets, BSNL goes out and does something as vague as offering free dialup Internet service. Details here.

I haven’t used dialup for 4 years now, but I really do dread going back to a regime where connection speed was 32-64 kbps at best, would get disconnect often, especially if there was an incoming call. To top it all, there were huge telephone bills. Yes, we soldiered on despite these barriers and more, but that was because we were - and still are - connectivity addicts - and could afford it. I just hope that for those who try this service, the quality of service is better, so they don’t get put off by the great big Internet hype. And that free is free, and without irrational call charges.

Note to Anil Jain, DGM for BSNL’s broadband division: Free broadband for a month would certainly have been a better way of achieving “the primary objective of increasing the Internet penetration in India to bridge the rural-urban digital divide in the information, communication and technology (ICT) sector.” [via TMC Net]

Smart Broadband To Launch IPTV Services With HFCL And MTNL; An HFCL Group Company?

Smart Broadband, an IPTV service provider, has tied up with MTNL to provide IPTV Services in Delhi, reports Business Standard. I think means that now three service providers are involved in providing IPTV services in Delhi - Smart Broadband, Time Broadband and Aksh Optifibre…this when IPTV hardly has any subscribers in India.

Smart Broadband will also be providing IPTV services to HFCL Infotel in Punjab, which are expected to be rolled out in the next three months. HFCL is targeting a subscriber base of 20,000 in their first phase.

To be honest, the name “Smart Broadband” didn’t quite ring a bell, and I couldn’t locate their website. Looking around, it appears that Smart Broadband is the same as Smart Digivision - they have the same COO: Kapil Dev Kumar, an old HFCL hand and former VP at Bharti Airtel. Whats more, Smart Digivision is an HFCL group company, so the deal with HFCL Infotel is with a group co. Smart Digivision also has a contract with BSNL for IPTV in 53 cities, and according to their presentation (pdf), is responsible for licensing content, end-to-end service and customer support for IPTV.

Related:

– IPTV India Forum
– IPTV Gets The Government Nod; DTH, Cable FDI May Be Increased
– Time Broadband To Launch Web-On-Call Service On BSNL Networks
– Is Airtel Getting Its IPTV & DTH Act Together?
– Is Videocon Looking To Acquire Loss Making IPTV And VoIP Co IOL Netcom?

Time Broadband To Launch Web-On-Call Service On BSNL Networks

I’ve been saying that the voice business is hot right now, but I’ll be truly amazed if this product works out: IPTV service provider Time Broadband (MyTime) has inked a deal with California based VoIP co Internet Speech to launch the Web-on-Call service in India, using the patented netECHO technology.

Apparently, Web-On-Call will provide an audio version of content from any website in a short and “easily navigable” manner, hence going beyond traditional voice portal services like music, news, weather etc. Future versions are expected to support shopping, stock market transactions, banking and e-commerce. A Voice based Internet…I really have to try this out before I believe it.

Even if the technology has the capability, I wonder if it has the speech recognition capability for Indic languages. Also, a lot depends on how they price the service - at the standard Rs. 6/min rate for Voice access, I don’t think it will work.

The rollout of Web-on-call is planned bundled with the launch of MyTime’s IPTV on BSNL network - over the next few months. The service initially cover 20 cities, and later available via BSNLs landlines. The Web-On-Call brand will be owned by both Time Broadband and Internet Speech. Media reports on the full commercial launch BSNLs IPTV network have been contradictory, and we have our doubts about whether it will be able to compete with DTH - a better technology can fail because of poor regulatory policy, inadequate marketing and lack of consumer education. Also note that now both IOL Netcom and Time Broadband have entered voice related businesses.

Time Broadband had earlier inked a deal with Stanton Technologies for entering the Chinese market, and announced plans to launch IPTV over Mobile. The founders - Amit Dev, Sujata Dev and Tushar Shah, and investor Aniyan Kutty Kunju, Chairman of the Clarion Group, own 60 percent in Time Broadband, while Dubai Ventures owns 40 percent.

Related:
– Voice Search Engine Ubona Gets Funding From Capital18; Thoughts On Voice Search
– OnMobile’s MSearch
– Is Videocon Looking To Acquire Loss Making IPTV And VoIP Co IOL Netcom?

Pre-IPO, BSNL Gets Spectrum, Waivers; To Manufacture Handsets, Modems; Unions Stalling IPO

The Indian Government has already approved the release of one block each of 3G spectrum of 2×5MHz in the 2.1 GHz Band for BSNL and MTNL, both public sector telecos. The government release itself states that they’re allowing government owned companies “a first-mover advantage over private operators”. What’s more, they’re also being given a block of 20 MHz Broadband Wireless Access (BWA) spectrum in the 2.5 GHz band, at 2645 MHz.

Besides this, they’re guaranteed 3G and BWA spectrum at a price equal to the highest bid in the service areas. License fees for rural lines has also been waived for BSNL, and they’re getting upto Rs. 2000 crore per annum from the USO Fund to make up for the removal of the Access Deficit Charges. Not that it’s going to do them much good, though. ET reports that BSNL is likely to launch 3G only by June, after receiving equipment from Ericsson. The initial launch will be for 10 million lines.

BSNLs plan to offer ESOPS to its employees isn’t cutting much ice with them though - they’re holding out for more. As per ET, the ESOPs would have meant a windfall of Rs. 1.5-2 lakh for each employee. BSNL is expecting 2008-09 revenues at Rs 45,000-50,000 crore.

Raja expects BSNL to list at Rs. 300-400, which would value the company between $37-45 Bilion, much much more realistic than the $100 billion that was being quoted earlier. Remember that Bharti Airtel, the biggest mobile company currently has a market cap of close to $40 Billion. BSNL has more landline subs, and is the third largest mobile player. An of course, all the government sops would count for something. Maybe.

BSNL plans to invest upto $3 billion per year over the next 3 years on overall capex. The PSU will invest Rs. 900 crores (around $220 Million) in manufacturing Consumer Premise Equipment (Modems) at its Kolkata factory. DNA reports. they’re also planning to manufacture handsets, which they will supply to other telecom providers and other mobile handset makers.

BSNL Gets Go-Ahead For $10 Bn IPO; $100 Bn Valuation?

So this is what it was all leading up to - the Board of Directors of BSNL, the public sector telecom operator, has recommended an IPO for listing the Government owned telco, reports the Economic Times. BSNL will disinvest 10 percent stake, at a valuation of around $100 bilion. Of course, this talk of $100 billion valuation could be just hype. If Bharti Airtel, the largest telco in the country has a valuation of $37 billion, what justifies a $100 billion valuation for the third largest…Government favoritism? Ownership of the last mile?

I’m not very surprised at the disinvestment plans, because:
– Disinvestment in the country has been on hold ever since the UPA government came to power, primarily due to the leverage that communist parties had. Recently, the communists withdrew support, and the government still survived the trust vote. Now without pressure from the left, disinvestment is back on the agenda.
– The government has been building valuation for a while now: in case of broadband, due to pressure from BSNL and MTNL, reportedly, the last mile has not been opened - giving the government telcos time to garner subscribers. There have been claims of favouritism in case of spectrum allocation as well, and even with the 3G policy, BSNL and MTNL are guaranteed 3G licenses. BSNL has been operating 3G services, but is unlikely to pay a penalty.
– Merger of BSNL and MTNL: there’s been talk of a merger between two for a while now, but while MTNL is listed on the stock exchanges, BSNL is not; once both companies are listed on the bourses, negotiations would be based on market cap.

The other interesting BSNL update is that IPTV appears to have been put on hild, a least in Kolkata. It appears that the issue was that it hadn’t signed deals with broadcasters directly, and went ahead with IOL Netcom, which was aggregating content. According to SK Chakravarty, BSNL Kolkata CGM, “Broadcasters are keen on entering into agreements with BSNL but not with any third-party which, in fact, has hindered the growth of IPTV.” IOL, as we reported earlier, has made significant losses; they have signed up some broadcasters, but if the larger players are not on board, the service just wont be able to compete with DTH and Digital Cable. Either way, it appears that content aggregators are going to lose if major broadcasters shut the door on them.

Update: BSNL appears to have launched IPTV in Jaipur

Related: Is Videocon Looking To Acquire Loss Making IPTV And VoIP Co IOL Netcom?

3G India: BSNL 3G Service Already Operational - 2Mbps Via EVDO for Rs 750/month

Note that the 3G auctions aren’t exactly “free and fair” - the government has already blocked spectrum and a license in each service area for public sector telcos- for MTNL in Delhi and Mumbai, and everywhere else for BSNL.

But it appears that BSNL has already been operating 3G services - CyberMedia reports that BSNL is offering EVDO services on a commercial basis, “as a pilot” in select cities. They’ve confirmed that they’re offering 2Mbps via EVDO at Rs. 750 per month, with the EVDO card priced at Rs. 6500. The service is also being offered in Kerala; BSNL is apparently even running a commercial in Bangalore cinema halls for the service. BSNL had earlier said they will roll out 3G in another six months.

Nripendra Mishra, Chairman of TRAI has passed the buck to the Department of Telecommunications (DoT), which is in the unique and not-very-impartial position: of defining government policy, and also as the owner of BSNL. The DoT has confirmed that EVDO falls under 3G, while Kuldeep Goyal, CMD of BSNL claims it is 2.5G. Meanwhile, MTNL has been testing its 3G service in and around Minto Road in Delhi on a non-commercial basis. MTNL is expected to launch 3G services in Delhi in another 4 months. More here and here.

Implications Of This Unfair Advantage

Apart from quality of service, 3G will have little or no impact on the price of voice services. The real difference will be in case of data access. Most other operators are expected to roll out 3G services next year; in fact, the auctions are expected to complete by December. Currently, there are two key players in wireless data access - Reliance Communications, which claims 60 percent of the market, and Tata Communications. BSNLs 3G data services are already operational, and as they roll out services in more Class A towns - particularly Bangalore, Pune, Hyderabad, which have a significant early-adopter user base, you might find RCom and Tata Comm losing ground, because they simply haven’t rolled out the services. BSNL already has quite a head start, but traditionally, their marketing has been lackluster - consumer outreach isn’t exactly their forte.