Friday, June 19, 2009

New Revenue Models for Indian Mobile Operators

Indian mobile operators have long been concerned by disintermediation: the intrusion by third parties into the originally closed relationship between operator and customer. But in 2009, mobile phone users are expected to download from sites managed by mobile device manufacturers, consumer electronics firms, and software houses.

Making his presentation on Trends in Telecommunication Services , Chetan Kumar Shivakumar, technical manager, Alcatel-Lucent said, The global financial turmoil has added new dimension to global telecommunication trends. Smart phones explosion in 2008 and continuation is 2009 adds to on-demand information and computing. Also recent Intel acquisition of WindRiver has shows that interest in this space is hugee.

Shivakumar said although operators are unlikely to earn any direct revenue from third-party application downloads, there are several options for them to generate income from downloads, including device back up; management of application transfers; and specialized services provided to third-party stores.

So mobile operator might target areas like offering hosted services by adding presence and location sensitivity to application; Add collaboration and conferencing services to application and Hosted gaming services. Besides mobile operator can offer application and device backup service by charging application service to subscriber s phone bills or by launching their own application stores. A slippery slope here are many free application out their, pain of managing store should generate enough revenue, he said.

Operators may be also able to earn revenues from developers and consumers by wholesaling presence and location-sensitivity into services. Consumers will benefit from application stores, but should be mindful of the seemingly inexorable risk that some applications may be contaminated by viruses.


Thursday, June 18, 2009

$13 Billion by 2013; Can Indian mobile reach this milestone?

The Compound Annual growth rate (CAGR) of the Indian mobile market is projected to grow at 12.5 percent from 2009-2013 and will exceed by $30 billion. According to Gartner, the India mobile subscriber base will cross around 771 million connections by 2013 and will grow at a CAGR of 14.3 percent in the same period from 452 million in 2009. India is also expected to become 2nd largest mobile consumer market after China.

"The Indian mobile industry has now moved out of its hyper growth mode, but it will continue to grow at double-digit rates for next three years as operators focus on rural parts of the country, growth will also be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets," said Madhusudan Gupta, Senior Research Analyst, Gartner.

The mobile market incursion is projected to increase from 38.7 percent in 2009 to 63. 5 percent in the year 2013.

This growth is primarily because of the operators increasing their focus on the rural market, local consumer durable and electronic companies entering the domestic mobile handset segment, and lower handset prices, Gartner said.

Prepaid subscribers continue to be dominating the Indian mobile connection market. They accounted for more than 93 percent of all mobile connections in 2008 and are expected to grow to more than 96 percent of the connection base by 2013, surpassing 741 million connections versus 312 million in 2008.

The postpaid subscriber base will exceed 29 million subscribers by 2013; grow at 2.5 percent from 23 million in 2008.

The churn rate in India is 53.2 percent in 2009, and despite a maturing market, the ratio is expected to increase to 59.6 percent in 2013.

The overall growth of mobile services in India will be significantly contributed by revenue from data services, with a CAGR of 16.8 percent from 2009 to 2013. Prepaid subscribers are expected to adopt data services faster and more than the post-paid segment. The bulk of revenue will continue to come from voice services.

With the increased growth in data services, the percentage of revenue coming from voice will reduce from 89 percent in 2008 to 86 percent in 2013.

Gartner predicts that a significant drop in Average Revenue per User (ARPU), as the bulk of new subscribers will come from rural areas that are dominated by prepaid subscribers.

With the new operators joining the market, the voice tariffs will decline substantially in 2009. Growth will be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets.


Has Microsoft's Bing gained marketshare from Google?

Microsoft Corp's Bing search engine won more market share from rivals last week, according to new industry data, but still trails Google Inc and Yahoo Inc considerably.

Challenging market leader Google -- which in turn is looking to break into Microsoft's core software market -- is a long-term project, said Microsoft chief executive Steve Ballmer.

"We have had some very good initial response," Ballmer said at a conference in Detroit. "I don't want to over-set expectations. We are going to have to be tenacious and keep up the pace of innovation over a long period of time."

Microsoft grabbed 12.1 percent of U.S. Internet searches for the work week June 8-12, according to data released by industry tracker comScore earlier on Wednesday.

That is up from 11.3 percent in the June 1-5 period -- the week in which Bing was launched -- and up from 9.1 percent the week before that.

For comparison, Google got 65 percent of U.S. searches in May, the last full month for which figures are available, followed by Yahoo with 20.1 percent and Microsoft with 8 percent.

Analysts and investors are keenly awaiting data for all of June to see if Microsoft can hold onto early gains.

Ballmer acknowledged the tough task of beating Google, which he referred to as "a big dog competitor".

The world's largest software company has long been determined to play a major role in the lucrative Web search market after watching upstart Google take a stranglehold.

At the same time, Google is looking to take advantage of its popularity to launch software that competes with Microsoft's, which has created a new source of tension between the two companies.

Microsoft ratcheted up that tension on Wednesday by claiming that Google's new Apps Sync for Microsoft Outlook software -- which allows users to share data between their Outlook e-mail and Google's online offerings -- disables a key function in Outlook.

"The installation of the Google Apps Sync plugin disables Outlook's ability to search any and all of your Outlook data," Outlook product manager Dev Balasubramanian wrote on a Microsoft blog. "It is also important to note that uninstalling the plugin may not fix the issue."

The problem, though relatively unimportant to users, represents a crucial struggle between Microsoft and Google for e-mail customers.

Google's new product allows business users to continue using Outlook for email and other tasks, but the back-end functionality and data storage moves to Google, instead of residing on a company's internal servers running Microsoft software.

Google did not immediately return a call seeking comment.

Microsoft shares closed up just less than 1 percent at $23.68, while Google's fell 0.2 percent to $415.16, both on Nasdaq.


Wednesday, June 17, 2009

Will MySpace slash 30% of US staff?

US Internet social networking giant MySpace said Tuesday it would cut 500 jobs, nearly 30 per cent of its domestic staff, in a restructuring aimed at boosting efficiency.

MySpace, a unit of media magnate Rupert Murdoch's News Corporation, said it was cutting payrolls "as part of a plan to restructure itself into a more innovative, efficient, and entrepreneurial business."

The restructuring plan affects all US divisions of the company and the round of job cuts will lower the domestic workforce to 1,000 employees, it said in a statement.

"Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company," said Owen Van Natta, MySpace chief executive.

"I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace. Our intent is to return to an environment of innovation that is centered on our user and our product."

Van Natta, who was named MySpace CEO in April, was a chief revenue officer and vice president of operations for Facebook when he resigned from the rival company in early 2008.

Facebook's popularity has soared amid a surge in social networking in the United States.

Facebook was the top social networking site when ranked by total minutes for the month of April, showing a gain of 700 per cent from a year earlier, according to a recent study by Nielsen Online.

MySpace was in second place, with its total minutes declining from 7.3 billion in April 2008 to 5.0 billion in April 2009.


Tuesday, June 16, 2009

Intel will launch two CPUs under the Celeron E3000 series

Chipmaker Intel Inc during the third Quarter of year 2009 is likely to replace the current Celeron E1000 series and is lining up production of its new 45nm Celeron E3000 series CPUs.

In a report said that the company will launch two CPUs under the Celeron E3000 series – christened the Celeron E3200 and E3300 – during the third quarter. The company has said that the two CPUs will boast of core frequencies of 2.4GHz, and 2.5GHz, respectively. They would also feature 1MB L2 cache, 800MHz FSB, and 65W TDP. Celeron E3000 series CPUs will support VT-x virtualization.

By Quarter 4, the company is also likely to come out with a new Core i7 CPU. The Core i7 960 CPU will debut with a core frequency of 3.2GHz.

It is expected that the Celeron E3000 CPUs will touch the 10% mark in the fourth quarter overall entry-level CPU shipments.

Meanwhile, the 65nm Celeron E1000s stand the chance of plummeting from 20% in the third quarter to 10% in the fourth. It has been forecast that Intel's Celeron 400 series will account for 18% of shipments in the fourth quarter, Atom D510 around 2%, Atom 330 around 50% and Atom 230 around 10%.

It is also foreseen that Celeron E3000 will jump to 21% during the first quarter of 2010, while Celeron E1000s might get wiped away from the market. The Celeron 400 series will account for around 15%, Atom D510 25%, Atom 330 27% and both Atom D410 and Atom 230 6% each, it is expected.

Continuing with its launches, Intel might also unveil its dual-core Atom D510 CPU for net tops. This is also expected during the fourth quarter, while a single-core Atom D410 CPU will be rolled out during the first quarter of 2010.

Softpro buys SA software company for $19 million

The Hyderabad-based SoftPro Systems, a IT Solution provider has acquired 100% equity stake in South Africa-based Cura Risk Management software for $19 million in an all cash deal. The move is likely to help the Indian company grow six fold to over Rs 60 crore by the end of this fiscal.

“The acquisition is the first step towards the turnaround of our fledgling company. The deal draws strategic benefits as we can utilise the established client base of the acquired firm. Also, we hope to become a $200 million company in the next five years,” said G. Bala Reddy, chairman & managing director, SoftPro.

SoftPro has tied up about $14.5 million of funds with Bank of India and Andhra Bank. Andhra Bank will part guarantee the funds. The company is also looking at infusing fresh equity in the business through a preferential allotment of shares. This will help the firm raise about Rs 53 crore over the next one and a half year. It will also use a part of the money to fund the acquisition.

The promoter group currently holds 46.5% stake in the company. However, the stake will come down to 41% after the preferential allotment. The equity base of the company will increase from Rs 6 crore to Rs 9.5 crore. “While a part of the money raised through preferential allotment will be used to fund the deal, the balance will be used to meet working capital needs,” said Reddy.

SoftPro will pay $16 million upfront and the balance in the next three years based on performance of the acquired company, Cura.

“We see the acquisition as the next stage of growth,” said Alon Apteker, director, Cura. The $8-million company provides integrated software solutions addressing the Governance Risk & Compliance (GRC) requirements. It has about 200 clients across the globe. According to an IT analyst, small IT firms can leverage on such deals as they get to expand demographically and bring business home. Also a company can utilise the technology and expertise locally.


Is the global recovery set to begin?

The worst is over for the global economy and a recovery is likely to begin later this year, says a bank report released here.

The global economic crisis has bottomed out and positive indicators have begun to emerge, said the report by the Royal Bank of Canada which is the top bank in the country. It said there were encouraging signs for global recovery as the US economy was showing signs of recovery after worst-ever declines in its GDP in the last quarter of 2008 and the first quarter of 2009.

Thanks to low interest rates, an easing in credit crunch and Obama's fiscal stimulus package, the US housing market is already showing some stability, it said. This, coupled with rising consumer confidence, hints at a moderate recovery for the US economy by the second half of 2009, the report said.

"The benefits of significant fiscal and monetary policy stimulus (in the US) are starting to have traction," said RBC chief economist Craig Wright. He said, "There is an unprecedented amount of money bolstering the world economy."

"What we will be watching is the impact this spending has on labour markets, as well as household and business confidence. The degree of impact will be a crucial factor in shaping economic recovery."

Though the recession has thrown six million Americans out of jobs - pushing the unemployment rate to a record 9.4% in 25 years, the recent data suggests that this rate has started declining, the report said.

It said home sales in the US are also poised to pick up as affordability improves.

But the most potent indicator of the onset of recovery was that US consumer spending has increased after six months of decline.

This trend will continue in the second half of 2009 because of low interest rates, firmer credit markets and fiscal stimulus, the report said.

About Canada, the report said its economy will shrink by 2.4% this year. With over 360,000 jobs lost nationwide since October, consumer confidence will remain low as the unemployment rate peaks at 9.2% by the end of 2009.

The report forecast that the Canadian dollar, which has rallied 15% since March, will hover between 85 to 92 cents US for the remainder of this year.


Monday, June 15, 2009

Would Air India need government bail out package to pay salaries?

For the first time since the losses hit the national carrier Air India, the payment of salaries for the current month of about 30,000 employees will be delayed by a fortnight.

Confirming this, an Air India spokesperson said, "The salaries of June will be paid on July 15 due to the resource crunch that the company is facing."

The payment of productivity-linked incentive (PLI) has also been delayed by 15 days, according to a circular issued by Air India management.

Air India's losses for the last financial year are estimated at around Rs 4,000 crore, up from Rs 2,226 crore in the previous fiscal.

Reports say the national carrier was planning to seek Rs 5,000 crore as additional equity, Rs 7,000 crore as a soft loan payable after five years at a five per cent interest rate, and a grant of Rs 2,000 crore.

However, top Air India officials have denied the figures, but said they are working on similar lines.

Maintaining that the financial crisis was foreseen last year, industry sources said the acute situation could have been avoided had Air India delayed the ongoing deliveries of aircraft, like its competitors Jet Airways and Kingfisher Airlines did.

They said there is no capacity since air traffic had gone down substantially due to the financial meltdown, and so the induction of additional aircraft could have waited.

Air India has placed orders for 111 new planes worth over Rs 45,000 crore and it currently has a paid-up capital of Rs 145 crore and authorized capital of Rs 1,500 crore package would not match Air India's expectations.


Sunday, June 14, 2009

Is India among top 2 emerging markets for Yahoo!

Internet search giant Yahoo! on Sunday said India is one of the 'top emerging markets' and it would release a slew of products over next few months for further consolidating its position in the country.

"India is one of the top two countries in the emerging markets segment and holds a lot of promise for us ... Products developed in the Indian lab and centres abroad are part of the pipeline of innovative products that will help us in the Indian market," Yahoo! Head of Audience (Emerging Markets) Gopal Krishna told media.

He, however, declined to comment on the details of the products. "Innovations around mail, instant messenger and front page (landing page) would be prime focus areas. We would also look at news properties like News, Bollywood and Buzz," he said.

Emerging markets contributes up to 65 per cent to the total users for some of the key global Yahoo! properties and is the fastest growing region from business perspective as well, he added.

One of the leading properties/products is Yahoo! Cricket, which attracted 2.4 million unique users per month emerging as the top cricket site in India, according to Comscore April 2009 data.

In February this year, Yahoo! India had entered into a three-year partnership with the International Cricket Council (ICC), becoming the exclusive online partner for all ICC events, including ICC World Twenty20, ICC Champions Trophy and ICC Cricket World Cup.

It has also partnered with companies like LG, Pepsi, Maruti, Tata Xenon, Honda, ICICI, Citibank and Cisco for advertising on the microsite. Yahoo! India also has a two-year partnership with Reliance, Krishna said.

Yahoo! India is also focusing on building its mobile business in the country. It is working on developing products, apart from the ones available on web to build its presence on mobile websites.

"We are looking at presenting users with a experience that is different from using Internet on PCs. Apart from the usual things, we are looking at developing applications specific to mobile handsets as well," Krishna said, adding that the mobile segment also presents a good opportunity in terms of advertising.

Worldwide spending on mobile advertising is expected to reach USD 19 billion in 2012, while the APAC market is forecast to touch USD 6.9 billion, according to eMarketer (March 2008).


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