BSNL expects to be profitable in 4 years: Ravi Shankar Prasad

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State-owned BSNL expects to be profitable in four years and has started registering rise in income from services, Parliament was informed today. ”BSNL expects to turn profitable in next four years or so, for which BSNL is taking several steps like augmentation of mobile network,” Telecom Minister Ravi Shankar Prasad said in a written reply in the Rajya Sabha. Revenue of Bharat Sanchar Nigam Limited (BSNL) during the last financial year was Rs 28,645 crore. As per BSNL, the company’s net loss stood at Rs 8,234 crore for 2014-15, the minister said. 

 

“Being a commercial organization, it is the constant endeavour of BSNL to compete in the market, increase its revenue and make profits,” Prasad said.

BSNL reported an operating profit of Rs 672 crore for 2014-15, aided by a fall in administrative costs and jump in revenue. It had posted an operating loss of Rs 691 crore in 2013-14, though in 2012-13 it declared an operating profit of Rs 916 crore. Prasad said that due to continuous efforts of BSNL, income from services increased by 4.16 percent in 2014-15 compared to the previous fiscal.

“Till June 2015, the average monthly gross mobile connections used to be in the range of 8 lakhs. From July 2015, this has gone up to an average of 15 lakhs,” he said.

The state-run telecom firm also gained customers from mobile number portability (MNP) service.

“BSNL was MNP positive in the months of July, August, September 2015 and January 2016,” Prasad said.

He further said BSNL has increased mobile network capacity under Phase-7 of its expansion plan and is setting up Wi-Fi hotspots on revenue sharing basis.

“Government has also assigned new projects to BSNL such as Comprehensive Telecom Development Plan for the North Eastern region for provision of mobile services in uncovered villages…at an estimated project cost of Rs 1975.38 crore and implementation of transmission media plan for NE region at estimated cost of Rs 295.97 crore,” Prasad said.

BSNL has also been given the task to roll out mobile towers at 2,199 locations in Left wing extremism affected areas at an estimated cost of Rs 3,567.58 crore and a project to augment connectivity at Andaman and Nicobar Islands and Lakshadweep islands at an estimated cost of Rs 99.03 crore, he added.

Reliance Jio launch will push competition, consolidate spectrum

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As Reliance Jio prepares for the launch of 4G telecom services in India, analysts feel the volumes and margins of incumbants will come under stress, even as the available spectrum will see consolidation as the company moves to a position of strength in the area.  ”The launch of Reliance Jio Infocomm will intensify competition which will squeeze the market share, EBITDA (earnings before interest, tax, depreciation and amortisation) margins and credit metrics of incumbents,” credit ratings agency India Ratings and Research said.

A wholly-owned subsidiary of the Fitch Group, the agency has also revised its outlook for the country’s telecommunications services sector for 2016-17 — from stable to stable-to-negative. India Ratings also expects the intensity of competition to increase as Reliance Jio also contends for a market share out of the existing pie of subscribers being serviced by incumbent operators, besides adding more to the etwork.

“Data market will be first to face the impact of increased competition resulting in a decline in data average revenue per users,” the agency warned.

Earlier this week, Reliance Industries chairman Mukesh Ambani said Jio — already being used by the company’s employees — will be ready for commercially launch in the second half of 2016 to offer high-speed mobile internet and voice services to 80 percent of Indians. Since this will need a lot of spectrum, Credit Suisse said in its analysus that the company was moving from a weakest to the strongest position in the area.

The analysis comes at a time when Anil Ambani’s Reliance Communications is moving towards gaining control over close to 20 percent of the total spectrum with private companies in India along with plans for a airwaves sharing pact with Jio in all 22 circles in the 800 MHz band.

“For first four years after acquiring spectrum in 2,300 MHz band in 2010, Reliance Jio’s spectrum holding was seen as a significant weakness in their strategy — relegating it to a pure-play data operator,” the Credit Suisse analysis said. ”However, over the last 24 months, Reliance Jio has swiftly acquired large amounts of spectrum in 1,800 MHz and 850 MHz bands through auctions and sharing and trading deals with Reliance Communications,” it said.

“As a result, we see Reliance Jio as increasingly moving towards probably the best spectrum holdings across private operators in India,” it added. ”Currently, being the only operator with a pan-India sub-1GHz liberalised spectrum and 30 percent share of all the liberalized spectrum, Reliance Jio’s spectrum portfolio has become now quite enviable.”

Three becomes the first mobile carrier in Europe to block ads at network level

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Mobile operator Three has announced that it will become the first major carrier in Europe to block ads at a network level. The move will no doubt upset ad companies, as well as the many digital publishers who rely on the revenue that ads generate.

Three UK and Three Italy have signed a deal with Shine, an Israeli company that specializes in blocking mobile advertising. If it is successful, the technology will expand to other Three markets across the globe.

Three says that it isn’t looking to eliminate all mobile advertising, rather it wants to give its customers more control over what they see. The company has outlined three goals it hopes to achieve by using Shine’s technology:

  • Customers should not pay data charges to receive adverts. These are costs that should come from the advertiser.
  • Customers’ privacy and security must be fully protected. Some advertisers use mobile ads to extract and exploit data about customers without their knowledge or consent.
  • Customers should receive adverts relevant to them, and not “have their data experience in mobile degraded by excessive, intrusive, unwanted or irrelevant adverts.”

It’s not clear how Three will meet all these goals, especially when it comes to asking advertisers to pay data charges, but it said it will reveal more details soon.

“Over the coming months Three will announce full details of how it will achieve these objectives and will work with Shine Technologies and the advertising community to deliver a better, more targeted and more transparent mobile ad experience to customers,” says a Three spokesperson.

Jamaica-based operator Digicel became the first to use Shine’s ad-blocking technology in September last year. Shine has said it plans to offer its services to more European carriers throughout this year, and the company has its sights set on the US market.

“Irrelevant and excessive mobile ads annoy customers and affect their overall network experience,” said Tom Malleschitz, chief marketing officer at Three UK. “We don’t believe customers should have to pay for data usage driven by mobile ads. The industry has to work together to give customers mobile ads they want and benefit from.These goals will give customers choice and significantly improve their ad experience.”