Carpe Manna- Seize the Gift Within

Why India enjoys the lowest mobile tariffs in the world?

1. Economies of scale

2. Cost of maintenance per sq km for the same is much less in India as compared to countries like US & Russia due to gigantic geographical area

3. Number of average users per sq. km. or per tower is considerably higher as compared to other parts of the world

4. Considerably low roaming charges and free incoming call while at intra circle

5. Bonus cards give an additional 20% reduction from base tariffs

6. Focus more on value added services rather than telephony

7. Increased competition

a. Number portability will create a more repulsive force & hence players will have to employ a pull strategy in retaining the loyal customer base.

b. Low barrier for entry creates competitive pricing

c. New entrants in the telecom sector and the rapid expansion of the existing telecom players also trigger the decline in the tariff as they come up with innovative strategies and prices, including freebies

d. Telecom sector continues to inflate at sky rocketing rate due to which atleast a dozen more service providers are still about to venture into the Indian market.

e. Increasing number of telecom operators and infrastructure overcapacity

8. The auction of 3G spectrum

New & Upcoming GSM players in the market include Uninor, Etisalat, Datacom, & S tel .

Challenges & improvements in Indian Mobile Telephony

1. Penetration in rural areas

a. Lack of affordability of telecom services

b. Low Average Revenue Per User (ARPU)

c. Lack of locally relevant content

d. The prevalent literacy levels

2. Maintenance overhead for major players

3. Challenges for construction of new towers due to resistance faced by some communities

a. As a result, forced to share towers and antenna sites which deteriorates quality of service

i. Cost per carrier can be reduced but the total cost to serve an area is still attached in the cost of these assets.

ii. The most excellent approach should aim for minimizing total cost of the technology maximizing sharing of resources

iii. Innovative technologies, such as fiber optics, processors, custom silicon should be used.

4. Overpopulation, hence running out of 10 digit numbers and spectrum

According to a recent survey by the Organisation for Economic Cooperation & Development (OECD), the mobile susbcribers in Netherlands enjoy the cheapest mobile tariffs across the world. The survey compared the cost for an average user (780 phone calls, 600 text messages and eight multi-media messages) in 30 countries in August’08 and found prices varied from $11 to $53. Netherlands was followed by Finland and Sweden with lowest tariffs. The highest prices were paid in the US, Canada and Spain.

www.WirelessFederation.com/news:

Infrastructure.indd

Non Linear Trend Analysis forecasting method by least square method

Using a polynomial equation of the 5^th order, forecasting the number of subscriber base in each category in India

Data upto 2009 was obtained from TRAI, Annual Report, 2009 (In millions)