News, views and commentary from the telecoms sector across emerging markets and developing countries worldwide

Monday, 9 February 2009

Telcos hit by high licence prices in India and Romania

These days it is proving rather tricky not to make a blog entry without some reference to the global economic downturn. When I was putting some notes together for today's posting I thought I might manage it, but then I spotted the latest post on Dean Bubley's excellent Disruptive Wireless blog. Dean writes about the panel discussion which he will be moderating at Mobile World Congress in Barcelona next week, the theme of which is 'Prospering on a Shoestring', i.e. looking at "various tactics and strategies that can be employed by operators to mitigate the worst impacts of the downturn". In the years before I had the luxury of sharing an office with the in-house analysts at Informa Telecoms & Media, I had to beg, steal (not literally) and borrow information when working out what should be on the agenda of the various industry conferences it was my task to organise. Dean Bubley was always an excellent source of valuable insights and my hunch is that in this Highdeal-organised panel session, he will ask very challenging questions and stimulate lively but civilised disagreement between the participants. I am not sure if Dean rounded up the panellists himself, but whoever is responsible gets ten out of ten for putting together telco operator representatives from varied markets. Telekom Slovenije and Mauritius Telecom on the same panel? I doubt that happens very often.

I won't be there to see Dean stirring up debate. Having made it to two consecutive 3GSM/Mobile World Congresses, this year I will not be in Spain for the annual cellular industry get-together. Instead, I shall be using the next three weeks to prepare for the role I will be taking on in March. In case that sounds like a boringly pragmatic use of what could be a nice bit of free time, I should point out that a good deal of my preparation work will be done within sight of a swimming pool and golf course in south Florida. Much as I'd love to watch cold rain falling on melting snow for the rest of this month, family obligations compel me to turn my back on the dark, short days of northern Europe in favour of milder climes. It's a hard life...

I don't anticipate that this blog will grind to a halt while I am catching some rays in the Sunshine State, although I will have to work out my connectivity options. Cost-conscious in these troubled times, my host in Florida has ditched his PSTN line and broadband service and, when not in his office, is now linked to the wider world only by his AT&T Mobility iPhone. I'll fight him for it...

While enduring a punishing regime of sunshine, warm weather, free babysitting and free room and board, I will continue to keep an eye on what's going on among the telcos active in emerging markets. What caught my eye today was really just a case of picking up from yesterday's musings about the prospects for 3G and WiMAX in India.

Today's Cellular News mailout included a piece on how Vodafone Essar plans to meet the cost of its bids in the country's delayed 3G and WiMAX auctions. As I mentioned yesterday, the latest delay is a result of the country's Finance Ministry weighing in to see if the the reserve price for the 3G auction can be doubled. The Cellular News article provides the numbers: the current reserve price for the 3G auction is US$412 million with the Ministry now hoping for at least US$824 million.

Working to bring 3G services to market in India certainly seems to be a task fraught with difficulties, of which this demand from the holders of the nation's coffers is just the latest. Also sticking a spanner in the works is the country's Defence Ministry, which, according to this article, is set to release just one fifth of the unused defence sector radio spectrum that the Department of Telecommunications had hoped for.

In this challenging context, who can blame Vodafone Essar CEO Asim Ghosh for taking up the option to retire at the end of next month? According to a second Vodafone India-related Cellular News story today, Ghosh, who joined the former Max Touch-branded operator in 1998, is to be replaced by Marten Pieters, a former CEO of Celtel International, the pan-African cellco which is now part of Zain. Pieters is currently a director of Millicom International Cellular, a Luxembourg-headquartered company with mobile operations across Africa, Latin America and Southeast Asia.

While the 3G licence process in India has hit a number of hurdles, I discussed yesterday the belief that once these are overcome, the greater efficiency of the technology vs. 2G networks will turn out to be a key driver of accelerated growth of the country's overall mobile market. I wrote about a proponent of this view arguing that the case for 3G looks very positive and that WiMAX also looks a reasonable bet.

WiMAX fans will be more disappointed by news from Romania, where Telecompaper reports that absolutely nobody fancies either of the two licences in the 3600–3657 MHz and 3700–3757 MHz radio frequency bands for providing broadband wireless access services. Having acquired the tender book, a diverse group of initially interested parties have all come to a negative response to the EUR 7.5 million licence fee. These include two long-established mobile operators - Cosmote's Romanian operation and the country's outpost of the Vodafone empire. Also interested was RCS & RDS, a cable MSO and broadband service provider which launched 3G services in December 2007 and now has a mobile market share of just over 5% according to WCIS. Two more to say no were Asesoft International (an IT solutions provider) and a company called Comcore Management.

That's all for today. Having failed to avoid mentioning the global economic horror story today, I will set myself the challenge of not mentioning the Indian 3G and WiMAX licencing processes tomorrow. That might be tricky with new twists and turns getting coverage every day.

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