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.

Big booster: Govt panel clears $100-billion mobile export proposals from global manufacturers

Source: The Economic Times, Sept 07, 2020

New Delhi: Applications by iPhone contract makers FoxconnPegatron and Wistron as well as Samsung, Karbonn, Lava and Dixon to export mobile phones worth around $100 billion from India have been cleared by the empowered group, said people with knowledge of the matter.

“The empowered committee has approved all applications estimated to export around $100 billion (Rs 7.3 lakh crore) worth mobile phones under the production linked incentive scheme (PLI) and all the applications will be placed before the cabinet probably this week,” a senior government official told ET.

Members of the empowered committee include the Niti Aayog CEO along with the secretaries of economic affairs, expenditure, revenue, the Ministry of Electronics and Information Technology (MeitY), Department for Promotion of Industry and Internal Trade (DPIIT) and Directorate General of Foreign Trade (DGFT). Five of the applicants are overseas ones, seven are Indian and another six are in the components manufacturing scheme, officials said.

Apple’s contract manufacturers and Samsung have submitted production estimates of phones worth $50 billion each in the next five years, according to the applications, said people with knowledge of the matter. Exports will be slightly lower in each case.

Scheme was Notified in April
“The extraordinary response to the PLI shows enormous trust of the global community in India’s manufacturing capability and leadership of Prime Minister Narendra Modi,” Communications & IT minister Ravi Shankar Prasad told ET.
The PLI scheme, which aims to make India a manufacturing hub for smartphones, was notified in April. Apple’s contract manufacturers started producing its latest handset models, the iPhone 11 and iPhone SE, shortly after that in India. The scheme is aimed at attracting manufacturers looking to move out of China amid Sino-US trade tensions, and even looks to draw companies from manufacturing hubs such as Vietnam. While Foxconn and Wistron already have plants running in India, Pegatron — Apple’s second-largest contract manufacturer — is looking to set up its factory and is talking to states such as Uttar Pradesh, Tamil Nadu, Karnataka and Andhra Pradesh.

Meanwhile, Samsung, which now exports phones worth about $2.5 billion from India, is all set to ramp up its production to handsets worth $50 billion in the next five years. Of this, $40 billion will comprise devices with a factory price of more than $200.

“Samsung exporting $2.5 billion out of India — of this, 97% was in the below $200 segment. By putting this floor price of $200 for eligibility in the PLI scheme, we have incentivised them to make high-value phones in the country and now they will be vacating this space of less than Rs 15,000 factory price for Indian players to occupy,” said the first official cited above. “This is an important stage as it will ensure that Indian players are able to climb up the learning curve and start making world-class smartphones to compete globally.”

The five global applicants are Samsung, two units of Foxconn, Wistron and Pegatron. The domestic ones are Lava, Dixon, Micromax, Padget Electronics, Sojo, Karbonn and Optiemus. According to government data, 22 companies had applied for the Rs 41,000-crore PLI scheme.

Telcos to gain as 2G base shrinks

Source: LiveMint.com, Aug 28, 2020

The loss of millions of 2G subscribers because of covid lockdowns is likely to improve Bharti Airtel Ltd’s and Vodafone Idea Ltd’s profitability as they will save significantly in fixed costs on servicing low-margin 2G users, analysts said. A fall in the number of low-paying 2G users could also boost the average revenue per user (Arpu).

The lockdowns led to an exodus of workers from urban to rural India following job losses, resulting in a fall in the 2G subscriber base.

Limited access to recharge centres also led to 2G service disruptions, as 4G customers prefer digital modes for recharge.

“We believe that the loss of subscribers may not hurt the telecom companies much. This could be due to two reasons—loss of customers mainly in the 2G space owing to labour migration, and not using dual SIM cards and moving to a single SIM,” said Sanjeev Hota, head of research, Sharekhan by BNP Paribas.

The bulk of the growth in Arpu that the telecom firms are looking for will depend on their ability to transition from 2G/3G customers to the 4G ecosystem, with the improved services leading to customer stickiness and higher revenue, said Rajiv Sharma, head of institutional equity research, SBICAP Securities.

“While tariff hikes across the industry will require some consensus among telcos, enabling upgrades to 4G devices will immediately improve data experience, usage and spend of subscribers to the ₹200 range, which is what telcos are aiming for,” Sharma added.

Loss of subscribers at the lower end, while retaining higher-paying 4G customers is in line with Airtel’s and Voda Idea’s business strategies. Both have been focusing on upgrading their 2G customer base to quality 4G users amid heightened competition from Reliance Jio Infocomm Ltd, which only offers 4G services. Currently, 49% of Airtel’s customer base is on 4G network, while for Voda Idea it is 37%.

However, telcos cannot do away with 2G services despite increased investments in 4G and for 5G rollout, as many customers still use feature phones.

According to global industry body for mobile operators, GSMA, 12-13% users will continue to use 2G handsets till 2025 in India. “Airtel and Vodafone Idea will keep 2G networks operational as they have to serve the needs of users on feature phones,” Hota said.

For Voda Idea, upgradation to 4G will come through partnerships, unlike Reliance Jio which plans to subsidize the 4G device ecosystem, the latest being the announcement of an entry-level 4G-enabled smartphone developed with Google Inc. Airtel has also launched a premium plan, Platinum, to attract high-paying 4G customers.

“Subsidising devices is not our play. We will work with original equipment manufacturers (OEMs) and non-banking financial companies (NBFCs) to help people upgrade to smartphones through easy EMIs where people can choose what devices they want,” said Akshaya Moondra, chief financial officer, Vodafone Idea, in a post-earnings conference call. Even though Airtel and Vodafone have lost 4.7 million customers each in May, while Reliance Jio Infocomm Ltd has added 3.7 million users, the loss or gain has not translated into any major change in usage patterns.

Samsung may move part of smartphone production to India, plans to make devices worth $40 billion

Source: The Economic Times, Aug 17, 2020

NEW DELHI: Samsung may shift a major part of its smartphone production to India from Vietnam and other countries with the South Korean electronics major finalising plans to produce devices worth over $40 billion (Rs 3 lakh crore) in the country, people familiar with the matter said.

“Samsung is likely to diversify its production lines for making smartphones to India under the PLI (Production Linked Incentive) scheme and this will have an impact in its existing capabilities across various countries like Vietnam,” a person familiar with the matter told ET.

Vietnam is the world’s second-largest exporter of smartphones after China. According to people familiar with the matter, Samsung has submitted estimates of making smartphones worth over $40 billion to the government in the next five years (under the PLI scheme). Out of this, phones with factory price of over $200 could account for over $25 billion. “…most of phones manufactured in this category will be exported,” a senior government official said.

Samsung didn’t respond to ET’s queries.

Move may Help India Plug FTA Gaps
Government officials said Samsung’s move would also help plug a major loophole in India’s efforts to find ways to eschew cheap imports from Association of Southeast Asian Nations (ASEAN) countries to India, owing to the Free Trade Agreement the country has with the trading block.

The company runs its largest mobile phone manufacturing unit in the world in Noida, from where it also exports to other markets. The company currently makes roughly 50% of its phones in Vietnam, as per industry estimates. It is in the process of winding down manufacturing in South Korea, where labour costs are high. In addition, it has manufacturing bases in Brazil and Indonesia.

Once Samsung’s move fructifies, the company will join iconic smartphone major Apple, which is also in the process of shifting a key part of its production line for smartphones to India. The global smartphone export market is about $270 billion. By value, Apple has a 38% market share and Samsung 22%. By volume, Samsung has 20% and Apple 14%.

Over two dozen companies pledge $1.5 billion to set up mobile phone factories in India

Source: The Economic Times, Aug 17, 2020

India’s latest set of incentives to entice businesses moving away from China seem to be working, with companies from Samsung Electronics Co. to Apple Inc.’s assembly partners showing interest in investing in the South Asian nation.

Prime Minister Narendra Modi’s government in March announced incentives that make niche firms — electronics manufacturers — eligible for a payment of 4%-6% of their incremental sales over the next five years. The result: about two dozen companies pledged $1.5 billion of investments to set up mobile-phone factories in the country.

Besides Samsung, those that have shown interest are Hon Hai Precision Industry Co., known as Foxconn, Wistron Corp. and Pegatron Corp. India has also extended similar incentives to pharmaceutical businesses, and plans to cover more sectors, which may include automobiles, textiles, and food processing under the program.

While companies have been actively looking to diversify supply chains amid the U.S.-China trade tensions and the coronavirus outbreak, it hasn’t yet translated into big gains for India despite the nation making it cheaper for businesses to open shop. Vietnam remains the most favored destination, followed by Cambodia, Myanmar, Bangladesh and Thailand, according to a recent survey by Standard Chartered Plc.

“There is a reasonable chance for India to gain in terms of incremental investment of supply chains within the country over the medium term,” said Kaushik Das, chief India economist at Deutsche Bank AG in Mumbai. “These programs are aimed at increasing India’s manufacturing share in the gross domestic product.”

The government expects the program for electronics alone could lead to $153 billion worth of manufactured goods over the next five years and create about one million jobs directly and indirectly.
This would bring an additional investment of $55 billion over five years, adding 0.5% to India’s economic output, according to analysts led by Neelkanth Mishra at Credit Suisse Group AG. This could shift an additional 10% of global smart-phone production to India in five years, most of it from China, they wrote in a report Aug. 10.

That complements Modi’s goal to grow the share of manufacturing in the economy to 25% from the current around 15% as part of his ‘Make in India’ program. His government has already lowered taxes on companies to among the lowest in Asia, seeking to attract new investments in an economy headed for its first contraction in more than four decades this year.

The latest output-linked incentive plan is a “big win for Make in India,” Amish Shah, an analyst at BofA Securities, said in a report to clients. He sees gains for industrials, cement, pharmaceuticals, metals and logistics, with long-term indirect benefits across many sectors.

Phonemakers in India build capacity  to  tap global orders

Source: LiveMint.com, Aug 10, 2020

Smartphone makers in India are seeing rising interest from global firms for partnerships to produce phones and key components in India, said two senior industry executives.

This comes amid border tensions between India and China, and the Modi administration’s call for self-reliance in the production of mobile phones and electronic parts. The government announced in June a production-linked incentive (PLI) scheme for firms to promote electronics manufacturing.

“We are looking at a very big opportunity, and we’re already in talks with large global players for servicing not only the domestic markets but also export markets,” said Atul Lall, CEO of Dixon Technologies.

Dixon Technologies also owns Padget Electronics—among domestic manufacturers that have applied for the ₹41,000 crore PLI that aims to make India a global manufacturing hub for smartphones. The country is currently the world’s second-largest smartphone market, with 152.5 million units shipped in 2019, according to IDC.

According to government estimates, global and Indian companies that have applied for the PLI scheme will produce goods worth ₹11.5 trillion over five years and export about half of the production.

The scheme extends an incentive of 4% to 6% on incremental sales of goods manufactured in India under the targeted segments.

Smartphone makers have already begun investing in expanding capacities and their manufacturing capabilities to move beyond just assembling phones, to a more “design-led” manufacturing approach that includes software and hardware design, and product aesthetics.

“We also have to extend our service to the electronics manufacturing sector (EMS). And that’s the reason why we’re investing in Sojo as well for EMS,” said Shailendra Nath Rai, co-founder of the Lava brand of smartphones. Lava and its unit, Sojo Manufacturing Services, have also applied for the PLI scheme. EMS includes the manufacturing of display panels, camera modules, silicon wafers and other parts.

Lava plans to produce as many as 100 million smartphones annually in the next few years, while Dixon’s Lall said the company will be able to make almost 70-to-80 million smartphones per year soon. Both did not give a specific time frame. To attract large mobile phone vendors to India, the country needs to ramp up its manufacturing capacity, Rai said, adding that Lava is already investing in building Sojo’s capacities to meet future requirements.

Airtel ties up with Amazon to sell AWS solutions to companies in India

Source: Business Standard, Aug 05, 2020

New Delhi: Telecom service provider Bharti Airtel on Wednesday announced a multi-year, strategic collaboration agreement with Amazon Web Services (AWS) to deliver a “comprehensive set of innovative cloud solutions to large enterprise and small and medium enterprise (SME) customers in India”.

Airtel serves over 2,500 large enterprises and more than a million emerging businesses and companies with an integrated product portfolio, including Airtel Cloud, a multi-cloud product and solutions business.

Airtel Cloud will build an AWS Cloud Practice supported by AWS Professional Services, as well as develop differentiated Airtel Cloud products and capabilities leveraging AWS services, Airtel’s data centre capabilities, and Airtel’s network and telecoms offerings. Airtel customers will benefit from an integrated sales, consulting, and support approach from both companies, and improved security, scalability, and cloud management capabilities.

Additionally, Airtel leverages AWS services for development of its digital applications. Airtel is also a delivery partner for AWS Direct Connect, a cloud service solution that makes it easy to establish a dedicated network connection from a customer’s premises to AWS, providing customers with “increased bandwidth throughput, consistent network performance, and private connectivity”.

“I am delighted with the expansion of our relationship with Airtel. Indian companies are using the cloud to innovate, and in order to operate at an increased scale and speed. Many need partners like Airtel, with deep cloud expertise and an industry-focused approach to support them,” said Puneet Chandok, president, commercial business (India and South Asia), Amazon Internet Services.

Through multiple strategic alliances, Airtel Cloud already provides data centre services, managed services, and cloud services to top Indian and global enterprises, start-ups, SMEs, and governments.

Airtel renews pan-India managed services partnership with Ericsson

Source: Business Standard, Jul 21, 2020

New Delhi: Bharti Airtel has renewed its agreement with Swedish telecom gear maker Ericsson to manage pan-India network operations, the companies said in a joint statement.

Under the agreement, Ericsson will also manage Airtel’s network operations centre and field maintenance activities across India.

“The three-year deal will see Airtel launching Ericsson Operation Engine during 2020.

Ericsson will deploy the latest automation, machine learning and artificial intelligence (AI) technologies to enhance Airtel’s mobile network performance and customer experience,” the statement said.

Ericsson has been providing telecom network equipment and services for 2G, 3G, 4G, and recently both the companies started running 5G trials.

“We are pleased to strengthen our deep partnership with Ericsson as part of our vision to build a future ready network that enables world-class experience for our customers,” Bharti Airtel Chief Operating Officer Randeep Sekhon said.

Ericsson said it has contracts to handle over 300 networks globally for managing and operating multi-vendor and multi-technology networks. “This agreement demonstrates the continued confidence in our products and end-to-end solutions in Bharti Airtel’s network and IT operations. We will continue to develop data-driven insights to deliver enhanced performance focused on end-user experience,” Ericsson’s head for South East Asia, Oceania and India, Nunzio Mirtillo said.