Cabinet approves ₹2,480 crore FDI in ATC Telecom

Source: LiveMint.com, Nov 25, 2020

Union Cabinet on Wednesday approved ₹2,480 crore foreign direct investment (FDI) in ATC Telecom Infra Pvt Ltd. ATC Asia Pacific Pte. Ltd is looking to acquire 12.32% stake in ATC Telecom Infra Pvt Ltd through the FDI route.

“The Cabinet Committee on Economic Affairs chaired by Prime Minister Shri Narendra Modi has approved the FDI proposal no. 4930 for acquisition of 12.32% of the equity share capital (on a fully diluted basis) of M/s ATC Telecom Infrastructure Private Limited by M/s ATC Asia Pacific PTE Limited as a result of exercise of put option by M/s Tata Tele Services Limited (TTSL) and Tata Sons Private Limited (TSPL),” the Union cabinet said in a statement.

This would lead to foreign direct investment inflow of ₹2,480.92 crore. With this approval the cumulative FDI of M/s ATC Asia Pacific PTE Limited (ATC Singapore) into ATC Telecom Infrastructure Private Limited (ATC India) will be ₹5,417.2 crore in financial years 2018-19 to 2020-21.

ATC Telecom Infrastructure Private Limited is engaged in the business of providing telecom infrastructure services to telecom operators. The company has existing FDI approval up to 86.36 % and with this approval it will rise to 98.68% (on a fully diluted basis), the centre said. Founded in 2006, ATC Asia Pacific Pte Ltd’s business includes holding or owning securities of companies other than banks.

Deploying backend tech for 5G faces roadblocks

Source: LiveMint.com, Nov 04, 2020

There could be a delay in the rollout of 5G technology because of differences between most states and the Centre in policies for setting up critical telecom infrastructure, senior industry executives said.

One such issue is the fee levied by states on companies for installing mobile towers and laying fibre cables. Many states also charge annual and renewal charges on telecom infrastructure providers. For states, and especially for municipal corporations, these charges are an important source of revenue.

To ease the development of telecom infrastructure across the country, the Union government in 2016 came out with the Right of Way (RoW) policy. The RoW is a framework to set up telecom towers, lay fibre cables, settle disputes in a time-bound manner and to improve coordination among private firms, states and local bodies.

While the rules have existed for four years now, only 18 states and UTs have agreed to implement the policy so far. Delhi, Himachal Pradesh, Kerala, Punjab, Andhra Pradesh, Gujarat, Karnataka, Chhattisgarh, Puducherry, among others, are yet to adopt the framework.

“There are states with multiple policies at different levels such as municipal, panchayat etc., which creates confusion and chaos on the ground, thus delaying the telecom infrastructure rollout,” said T.R. Dua, director general, Tower and Infrastructure Providers Association (Taipa).

Local authorities in many states charge a fee of ₹10-50 lakh per km in metros, tier-2 and tier-3 towns, whereas the department of telecom’s RoW rules prescribes a levy of one-time charges of ₹10,000 per mobile tower and ₹1,000 per km for laying fibre, Dua said.

Mumbai and Pune are the costliest to lay fibre, he said. Mumbai charges anywhere between ₹91 lakh to ₹1.3 crore per km, while Pune’s cost ranges from ₹55 lakh to ₹1.10 crore. In Hyderabad, the price is ₹15-45 lakh, and the fee in Delhi/NCR is ₹6-20 lakh.

Building the backend infrastructure for 5G rollout needs investments of tens of billions of rupees and delays or arbitrary charges by local authorities could increase costs further. The total capital expenditure required for the rollout of 5G, including spectrum, sites and fibre, is expected to be ₹1.3-2.3 trillion, of which ₹78,800 crore to ₹1.3 trillion is estimated for metros and A circles, according to a report by Motilal Oswal Financial Services released in October.

To be sure, the rollout of 5G services also depends on spectrum auctions, which may not happen in 2021 as was anticipated earlier. While Reliance Jio Infocomm claims to have created an indigenous 5G solution that can be launched as soon as the airwaves are available, Bharti Airtel is of the view that the ecosystem is underdeveloped for such technology.

According to the National Digital Communications Policy (NDCP) of 2018, fiberisation of towers across the country needs to be raised to 60% from the current 31% to sustain the increasing demand for 4G data and evolution to 5G technology.

Currently, the capacity of each tower site in India is about 300 Mbps (megabits per second) for 2G/3G/4G services and it will be required to boost to 1-5 Gbps (gigabits per second) to implement 5G, which can be done through fiberisation of backhaul.

“In order to achieve capacities of 1-5 Gbps, there is a need to deploy fibre across all the tower sites… 5G technology will also require a multi-fold increase in small cells deployment, with each small cell having backhaul on fibre,” Dua said.

About 4,000 tower sites support 4G services and in cities such as Mumbai, where the dependency on network is higher and areas congested, 6,000-7,000 sites are required. For 5G services, the number of tower sites will automatically go up to 14,000-15,000, said Anand Agarwal, group chief executive, Sterlite Technologies Ltd.

“Fast paced fiberisation will be the key for enabling smooth densification of network required for 5G services,” Agarwal said. Sterlite Technologies is a fibre optic cable manufacturing company, which recently partnered with Bharti Airtel Ltd, to build optical fibre networks across 10 telecom circles.

Both Dua and Agarwal emphasised that the rules of the Centre and states to set up telecom infrastructure are not aligned, which creates an urgency to bring in uniform policies and processes to improve connectivity on a macro scale.

US telcos dial Indian smartphone makers

Source: LiveMint.com, Oct 21, 2020

Top US telecom operators are turning to India to source low-cost mobile phones as the US ratchets up national-security scrutiny of Chinese companies, handing Indian handset makers such as Micromax and Lava an opportunity to win millions of dollars worth of contract-manufacturing orders.

Verizon, T-Mobile, AT&T and Cricket Wireless (a sub-brand of AT&T) have initiated talks with Indian smartphone makers, including Micromax and Lava, to procure unbranded handsets that will be bundled with data subscription contracts in the US, three people aware of the development said on condition of anonymity.

The US telcos’ move to cut their dependence on China comes amid broader trade and geopolitical tensions between Washington and Beijing. The US is also persuading its allies to avoid using Chinese telecom equipment as the world’s largest economy resists China’s domination in the strategic industry.

So far, telecom service providers in the US have typically procured almost all of the low- to mid-end mobile devices from Chinese companies such as TCL and ZTE. The increasing scrutiny on Chinese telecom gear has, however, prompted them to look at other options, industry executives said.

Rahul Sharma, co-founder of Micromax, said Vietnam and India are emerging as contract-manufacturing hubs outside China, and Indian firms are well placed to produce such devices for the US market.

“This is a trickle, which can soon turn into a tide for the domestic electronics industry,” said one of the three people cited above.

“Till some time ago, Indian companies weren’t even allowed to participate in the bidding process,” the person said.

Responding to a query, smartphone maker Lava said it has submitted its proposal last week and is awaiting a response from US procurement agencies. It already makes smartphones for AT&T. “While the shift started some time ago, the trend has become far more prominent in the past few months, with the volume of enquiries steadily picking up,’’ said the first person aware of the issue seeking anonymity.

“If the deals work out, it could be a nearly ₹2,000 crore per year opportunity for the company in the near term,” said S.N. Rai, co-founder of Lava. “We have relevance in the entry-level segment as we have good confidence in the supply chain. Brands like Samsung and LG are making a killing in the high-end segment because of the ban on Chinese phone maker Huawei,” said Rai.

While key hardware parts can still be imported from China, US telecom firms are increasingly relying on India to develop software solutions to ensure data privacy, the industry executives said.

An August report by telecom industry researcher Canalys said around 70% of all smartphones shipped in the US in the quarter to June was made in China, up from 60% in the previous quarter. The country saw 31.9 million smartphone shipments in the quarter, but the number should rise in the coming quarters as supply chains stabilize from pandemic-induced lockdowns.

About 30% of the US smartphone market is in the sub-$200 or low-end segment, according to analysts. “Tensions between the US and China have escalated in recent years, creating a perpetual state of uncertainty for all smartphone vendors except Samsung and LG,” said Vincent Thielke, an analyst at Canalys.

Micromax and Lava are two of the five domestic smartphone makers who have been approved by the government to receive benefits from its new production-linked incentive (PLI) scheme. The scheme offers a 4-6% incentive to firms for making phones in India.

Domestic handset makers are allowed to utilize the benefits for devices with invoice value below ₹15,000, while foreign manufacturers such as Foxconn can get benefits for phones with invoice value exceeding that amount. Unbranded phones sold by US telcos usually fall in the sub-$200 price bracket and will benefit from the PLI scheme. If Indian companies win the contracts, it will be a shot in the arm for the government’s plan to export smartphones worth ₹6.5 trillion from India in the next five years. It will also help Indian firms improve pricing in the domestic market, something they have failed to do as Chinese firms entered India. European and other telcos may also follow their US counterparts in sourcing smartphones from Indian companies, industry executives said.

Reliance Jio planning to sell 5G smartphones for ₹2,500-3,000 apiece: Report

Source: LiveMint.com, Oct 18, 2020

NEW DELHI: Reliance Jio is planning to launch a 5G smartphone for less than ₹5,000 and gradually reduce the price to ₹2,500-3,000 a unit when it scales up the operation, according to a company official.

The company will target 20-30 crore mobile phone users who use 2G connection at present.

“Jio wants to bring the device for less than ₹5,000. When we scale up the sales, it can be priced in the range of ₹2,500-3,000,” a company official said on the condition of anonymity.

An email query sent to Reliance Jio did not elicit any response. At present, 5G smartphones are available in India in the price range starting from ₹27,000. Jio was the first company that launched 4G mobile phones in India free for consumers where they were required to pay a refundable deposit of ₹1,500 for a Jio Phone.

At 43rd Annual General meeting, Reliance Industries chairman and managing director Mukesh Ambani had asserted to make India “2G-mukt” (free of 2G connections) and emphasised on the need to accelerate migration of 350 million Indians (currently using 2G feature phone) to an affordable smartphone, at a time when India stands at the doorsteps of the 5G era.

Ambani had also announced ₹33,737 crore investment by Google for a 7.7% stake in Jio Platforms, and said Jio will partner with the US tech giant to build an Android-based smartphone operating system.

The company is also working on its own 5G network equipment and has asked the Department of Telecom to allocate it spectrum for testing before exporting these products.

The government is yet to heed to the request of Reliance Jio. At present, India does not have 5G services and the government has not even allocated spectrum to telecom operators for running field trials aimed at promoting domestic ecosystem for the next generation technology.

Telecom subscription turns positive after 5 months, Voda Idea continues to dip

Source: LiveMint.com, Oct 12, 2020

Mumbai: As the country continues to unlock in phases, telecom subscriber base showed positive growth in July after five months of continuous dip, according to data provided by the Telecom Regulatory Authority of India (Trai). The number of telephone subscribers in India increased from 1,160.52 million at the end of June to 1,164 million at the end of July, thereby showing a monthly growth rate of 0.30%.

Total wireless subscribers (2G, 3G & 4G) increased by almost 4 million over the preceding month to 1,144.18 million at the end of July, registering a monthly growth rate of 0.30%.

However, Vodafone Idea continued to report subscriber losses after losing 3.7 million subscribers during the month. Bharti Airtel and Reliance Jio reported addition of 3.2 million and 3.5 million subscribers, respectively during the month. The wireless market share of Jio, Airtel and Vodafone Idea stands at 35%, 27.9% and 26.3%, respectively.

Vodafone Idea management had stated that their user base was impacted by the inability to recharge during the lockdown months in the June quarter but it has also registered a dip in July.

All service areas showed growth except Mumbai, West Bengal, U.P. (W), Karnataka, Bihar and Haryana in their wireless subscribers during July. Kolkata service area showed maximum growth of 2.03% in its wireless subscriber base during the month followed by UP East. Mumbai, West Bengal and UP West service areas reported maximum subscriber losses.

Airtel continued to lead active subscriber user base with 97% active subscribers compared to 89.3% of Vodafone Idea and 78% of Reliance Jio.

Wired broadband service user base has also improved rapidly during the pandemic from 19 million in February to 20.13 million in July.

The overall tele-density in India increased from 85.85% in June to 86.03 % in July. Urban tele-density increased from 137.35% at the end of June to 137.47% at the end of July and rural tele-density also increased from 58.96% at the end of June to 59.14% at the end of July.

All circles reported positive subscriber growth across both wireless and wireline segments unlike the losses reported since March.

In wireline segment, on monthly basis except circle of B Category circle of all categories showed growth rate in their number of wireline subscribers during the month of July, 2020. On yearly basis, only Circle C and Metro Circle showed growth in their number of wireline subscribers. However, on yearly basis all wireless circles have registered declining rate in their subscriber base.

Reliance Jio starts offering mobile services on 22 international flights

Source: LiveMint.com, Sept 24, 2020

NEW DELHI : Reliance Jio has started offering mobile services on 22 flights on international routes, with plans starting at ₹499 per day.

The company’s partner airlines include Cathay Pacific, Singapore Airlines, Emirates, Etihad Airways, Euro Wings, Lufthansa, Malindo Air, Biman Bangladesh Airlines, and Alitalia.

With this, Jio has become the second Indian telecom company to offer in-flight service. Tata group firm Nelco has started providing in-flight mobile services in Vistara airlines on the London route.

The company has announced three international roaming packs for international travellers from India priced at ₹499, ₹699 and ₹999 with 1-day validity.

While all plans offer 100 minutes of outgoing voice calls and 100 SMS, the ₹499 plan provides 250 megabyte (MB) of mobile data, ₹699 gives 500 MB and ₹999 plan comes with 1 GB of data.

None of the plans will allow incoming calls, while incoming SMS is free, according to information available on Jio website. First-time users of the in-flight mobile services will need to activate the plans on Jio network, and international roaming services will not work on JioPhone and Jio’s wifi device, according to the information on the website.

Mukesh Ambani’s next weapon to dominate telecom market is a Rs 4,000 phone

Source: Business Standard, Sept 22, 2020

Bengaluru: Reliance Industries Ltd has asked local suppliers to ramp up production capacity in India so they can make as many as 200 million smartphones over the next two years, according to people familiar with the matter, a potentially enormous boost for the country’s technology ambitions and a warning shot to rivals such as Xiaomi Corp.

India’s most valuable company is in talks with domestic assemblers to make a version of its Jio phone that would run on Google’s Android and cost about 4,000 rupees ($54), said the people, asking not to be identified since the plans are private. The inexpensive phones will be marketed with low-cost wireless plans from Reliance Jio, the parent company’s carrier, they said.

Reliance Chairman Mukesh Ambani is aiming to remake the country’s smartphone industry much like he did in wireless services, where his aggressive prices and simple plans quickly made him the dominant force. The billionaire is also aligning himself with the Indian government’s plans to build more domestic manufacturing, a possible boost for local assemblers like Dixon Technologies India, Lava International and Karbonn Mobiles.

“We are of course trying to build our domestic companies. We have a sweet spot in entry level phones,” said Pankaj Mohindroo, chairman of the India Cellular & Electronic Association, during an interview on Bloomberg Television. “The world has realized that India is a great place to do business and a great place to do manufacturing also.”

Reliance’s target of selling 150 million to 200 million phones over two years would represent a massive boost for local factories. India assembled an estimated 165 million smartphones in the year ended March, and about an equal number of basic feature phones, according to Mohindroo’s association. About a fifth of the smartphones cost less than 7,000 rupees, or about $100.

Reliance rival Bharti Airtel is also in talks with assemblers to build its own 4G device, local media has reported. The Business Standard reported earlier that Ambani was considering outsourcing phone-making.

Reliance in July struck a broad alliance with Google, in which the Alphabet Inc. unit would invest $4.5 billion and cooperate on technology initiatives. The partnership is still under regulatory review so Reliance is proceeding with the mobile phone initiative on its own for now.

Ambani has drawn more than $20 billion in investments from U.S. giants like Facebook Inc. for Jio Platforms Pvt, whose subsidiary Reliance Jio Infocomm Ltd. is placing the order. It’s worked with assemblers on prototypes for at least two years in secret and can bring a phone rapidly to market, though it’s likely to miss the November Diwali shopping season, the people said.

If Reliance succeeds in popularizing the new gadget, it could lift the prospects for Jio Platforms, accelerating Ambani’s efforts to build an empire spanning e-commerce, social media and games. Many of Jio’s nearly 400 million users use no-frills second-generation devices, paying $2 monthly for voice and data — a large potential market for the new device. It could eventually erode the market share of Chinese phonemakers such as Xiaomi.

“Jio has an opportunity to target more than half billion Indians who don’t own a smartphone and trigger a blue ocean market opportunity,” said Neil Shah, research director at Counterpoint Research. “With Reliance expected to work with Indian vendors, Chinese brands will lose out on a potential opportunity and market share.”

Reliance’s own requirements could hover around 5 million gadgets per month initially, but no single Indian company currently has that kind of capacity so the order will get split between multiple assemblers, the people said. At least two domestic smartphone makers are in discussions with the telecom giant, the people added.

Phones have become essential for accessing lite versions of apps from WhatsApp to YouTube in a country with an average GDP per capita of around $2,000. That’s why basic devices costing between $100 and $250 accounted for three-quarters of sales in the second quarter of 2020, according to Counterpoint.

Reliance’s fourth-generation wireless gadgets — one tier below 5G — are aimed at the estimated 350 million users of basic or feature phones that now dominate India’s industry.

Speaking at an industry event a few weeks ago, Ambani said millions were “trapped in the 2G era.”

“Their feature phones keep them excluded, even from the basic uses of internet at a time where both India and the rest of the world are standing at the doorsteps of 5G telephony,” he said.

The pandemic is spurring people to upgrade and creating new market opportunities. For example, parents are anxious to put a device in the hands of their kids so they can keep up with online lessons. There’re an estimated 250 million children between the ages of 6 and 16, according to UNICEF. “If they’re successful in getting even 10% of this base to upgrade, Jio can become one of the leading smartphone brands of 2021,” Shah said.

Trai issues fresh tariff disclosure norms to bring in transparency

Source: Business Standard, Sept 19, 2020

The Telecom Regulatory Authority of India (Trai) on Friday issued fresh norms for advertisement of tariff plans by mobile operators in order to bring in more transparency for users.

“It has been observed that measures adopted by telecom service providers are not transparent as they should be and some providers are not prominently highlighting additional terms and conditions. They are also collating the terms and conditions applicable to various tariffs on a single webpage and the relevant information either gets lost in the maze of detail or becomes ambiguous and incomprehensible to consumers,” the Trai directive said.

Trai has now directed telcos to publish, within 15 days, each tariff plan for postpaid and prepaid subscribers, service area wise. They must offer full information to subscribers at customer care centres, points of sales, retail outlets, websites, and apps with requisite disclosures. The operators have been asked to submit to Trai a compliance report within 15 days. They will also have to ensure continued compliance by way of self-certificate by the seventh of the month after each quarter ends.

On tariff advertisements, Trai has directed firms to prominently highlight additional terms and conditions.

Trai moots creation of industry body for cloud service providers

Source: LiveMint.com, Sept 15, 2020

The telecom regulator on Monday recommended setting up of the first industry body for cloud service providers operating in India.

The body will be created by the department of telecommunications (DoT) and will not have an eligibility criteria to become its member. It will neither charge fee for membership nor will require a registration period with the DoT.

“DoT may initiate setting up of the first industry-led body and require all CSP’s to become its members. This body would lay down broad principles and procedures to aid its functioning,” said Telecom Regulatory Authority of India (Trai) in its recommendations on cloud services.

The industry body will follow a light-touch regulatory framework and will initially limit the scope of cloud service providers (CSPs) to those offering infrastructure as a service (IaaS) and platform as a service (PaaS) in the country or to the customers here. Software as a service (SaaS) providers can voluntarily enroll for membership.

“Any expansion of scope to mandate membership beyond IaaS and PaaS may be considered by the industry body on need basis and recommended to DoT for acceptance,” Trai said.

Under the main industry body, an ad hoc system will be formed to frame broad rules, chart the organisation structure and election procedure. The adhoc body may have government officials and leading experts from the industry’s side, the sector regulator recommended.

The telecom regulator said the DoT should not give exclusive rights to one body, and in case the government observes that a body is unfair and becomes a monopoly of a few big entities, then it may register multiple industry bodies for cloud service providers.

Trai recommended that the industry body may review its experience and deliberate upon the need to form multiple bodies for different market segments. “DoT may require this review after two years of commencement of the functioning of the first industry body, or such time as it considers appropriate,” the sector regulator said.

Telecom service providers may not be allowed to share infrastructure and platform with a cloud service provider if they are not a member of the industry body registered with the DoT. Failure to enroll as a member may impact a cloud service provider’s continuation and could lead to other consequences, which the DoT has to notify on its website, Trai said.

The DoT has been suggested to give all details of the membership on its website such as six months for enrollment from the date of public notification. A member willing to enroll will have to submit information about their company or organisation and contact details.

iPhone makers among biggest winners in India’s $6.6 bn manufacturing plan

Source: Business Standard, Sept 14, 2020

Apple Inc.’s major iPhone assemblers are among the companies expected to win approval to participate in a $6.6 billion stimulus program to bring manufacturing to India, according to people familiar with the matter, a potentially seismic shift as the world’s most valuable company diversifies beyond China.

At a cabinet meeting on Wednesday, the Indian government is expected to approve a plan aimed at bringing $150 billion in mobile-phone production over the next five years, said the people, asking not to be identified because the matter is private. Among the dozen phonemakers already cleared by a high-powered government committee are Apple’s primary supplier Foxconn Technology Group, which had submitted two applications, and peers Wistron Corp. and Pegatron Corp., the people said. The three companies make virtually every iPhone sold globally in sprawling factories currently located mainly in China.

Under the Production Linked Incentive program, or PLI as it’s called, manufacturing incentives will rise each year in an ongoing effort to entice the world’s biggest smartphone brands to make their products in India and export to the world. Besides the Apple contractors, Samsung Electronics Co. is the only other applicant for the five slots allotted to foreign companies. China’s largest phonemakers Huawei Technologies Co. and BBK Group, which manufactures brands like Oppo and Vivo, are conspicuous by their absence.

Amid rising trade and political tensions between the U.S. and China, India is betting that many global brands will be keen to reduce their dependence on China. If successful, the program could set in motion a shift in electronics manufacturing in the next five years.

“It’s a thoughtful move by the government aimed at wooing Apple to bring significant iPhone manufacturing to India because, when the iPhone maker shifts, an entire ecosystem follows,” said Hari Om Rai, chairman and founder of Lava International Ltd., India’s largest homegrown phonemaker. “The next five years will be dramatic, and India could become the new China in phone manufacturing.”

Lava, based in the New Delhi suburbs, is among the Indian phonemakers applying for manufacturing incentives, along with Karbonn Mobiles and Dixon Technologies India Ltd.

To receive the incentives, foreign manufacturers including Foxconn, Wistron and Samsung must commit to specific investment and production targets of devices that sell for at least 15,000 rupees ($200); Indian phonemakers will have no such restrictions. Last month, Ravi Shankar Prasad, India’s minister for electronics and information technology, told reporters that Apple accounts for 37% and Samsung 22% of global sales revenue share from mobile phones. The incentive scheme would “increase their manufacturing base manifold in the country,” the ministry said in a statement.

Apple did not respond to requests for comment.

Pegatron, the second-largest iPhone assembler after Foxconn with a number of factories in China, said in July that it would set up a plant in India. Apple accounts for more than half of Pegatron’s business. If approved, Pegatron’s first India factory would be eligible for PLI, the people said.

In the next five years, India could attract an additional 10% of global handset production, Credit Suisse said in a recent note. And though the country is the world’s second-largest handset market with plenty of room for domestic sales growth, the government’s clear aim is to eventually become a global manufacturing colossus to rival China. Almost two-thirds of the stimulus program is targeted at the export market, the people said. Pankaj Mohindroo, chairman of India Cellular and Electronics Association, a trade group that represents leading phonemakers including Apple, Oppo and Xiaomi, said incoming handset makers will be accompanied by a host of smaller sub-assemblers and component makers, expanding the sector to seven times its current size in the next five or so years.