Sun Microsystems jumps into IPTV market

Sun Microsystems has decided to jump into the IPTV market with a video on demand (VoD) system, targeted primarily at telcos although there's no reason cable companies couldn't use it as well. Sun's system is claimed to have ten times the capacity of any other VoD server now on the market.

What Sun has brewed up is an offering its calling the Sun Streaming System that, in its maximum configuration, can dish up 160,000 simultaneous video streams, pumping the video out to users via 32 10 Gb/s Ethernet ports. Such a high end configuration will cost only about $50 per video stream, or around $8 million in total, Sun said. Such a configuration could also store the entire Netflix video library - about 60,000 movie titles - in a single six foot high storage rack.
What Sun has crafted compares to estimates of as much as $200 to $250 per stream from competitors, although with the IPTV industry in its infancy those first-to-market prices are sure to tumble rapidly. Sun's new system consists of the Sun's own streaming software, the Sun Fire X4950 Streaming Switch, standard Sun Fire X4100 and X4500 servers, and Sun Fire X4500 "Thumper" storage systems. The keys to the system are the new switch and the Thumpers.

Video on demand and IPTV are expected to become widely available by 2010. It's not clear whether Sun's offering will mate with Microsoft's IPTV offering, replacing the VoD server in Microsoft TV, or whether it will only work with other vendors' middleware. Microsoft, in a pitch for its IPTV system a few weeks ago, bragged of a string of new hardware vendors whose offerings worked with Microsoft TV - and Sun was on that list. Notably, Nortel has signed up as the lead reseller for the Sun Streaming System and Nortel is, separately, in bed with Microsoft on the VoIP side of the house.

Free broadband to all Indians?

The government of India is considering a radical scheme under which it will provide free broadband and landline phone service to all Indians, paid for by billions of dollars in telecom taxes now just sitting idle in the bank.
The free broadband would be at 2 Mb/s.
In India, as elsewhere around the world, the phone companies have been reporting declining numbers of landline subscribers. The free service could start rolling out as quickly as 2009. Government owned Indian phone companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) would provide the free service. Those two companies already provide the vast majority of all of Indian broadband. By the end of this year they are expected to account for 7 million out of 9 million DSL lines in the country, according to Indian government plans, which call for a massive xDSL rollout this year. There were only 2.3 million CSL lines in the country at the end of last year, of which BSNL accounted for almost half.
With landline service - for those who still want it - and broadband free, India's phone companies would be expected to look to various unspecified value-added services for their revenue, according to the government plan. "The move holds the potential to kill the telecom business as we know it," said the Indiatimes.
Funding the plan, and paying for a nationwide fiber optic network to be built and run by Department of Telecom (DoT), will be India's Universal Service Obligation Fund (USOF) into which all telecom operators in India cough up 5 percent of their annual revenues. Estimates are that as of the end of March the USOF stood at over $2.2 billion, of which only part would be needed to pay for the plan.

Hot spot market getting hotter - McDonalds working on turning its 4,000 locations into hot spots

According to ABI Research, the global hot-spot marketplace is set to grow by nearly 25 percent in 2007. By the end of this year, there could be nearly 180,000 hot spots situated around the world, with the Asia-Pacific marketplace going from simmer to boil.
While some 72 percent will be located in North America and Europe, the Asia Pacific region is growing rapidly. Despite China being slow on the uptake, Asia Pac as a whole will come close to matching the number of North American hotspots by 2012.

Europe continues to be the market leader, boasting more than 70,000 hot spots.
ABI points out that one major driver of Wi-Fi hot spots is retail establishments, with McDonalds working on turning its 4,000 locations into hot spots. The growing Wi-Fi hot- spot market is fueling a demand for Wi-Fi access points. More than 900,000 access points will be shipped this year specifically for use in hot spots. Not only are hot-spot and subscriber numbers growing, we have observed a dramatic increase in the number of Wi-Fi sessions per subscriber. This means subscribers are connecting more often to check their e-mail and surf the Internet.

With almost 46,000 hotspots world wide, the hospitality industry continues to embrace Wi-Fi, and ABI Research believes voice-over-Wi-Fi will become an attractive choice for many major hotel chains, both for guests and for staff. Boingo and Wayport reportedly are working with handset manufacturers to help ensure Wi-Fi-enabled phones will function at these two operators' hot spots, even though they might not have the Web browsers normally required for authentication.
In addition, many hospitality operators are using their Wi-Fi networks for internal communications as well as for public hot spots for guests; for example, some hotels are using "Star Trek"-type communicator devices made by Vocera to keep in contact with employees. Carriers will have to adjust their business models to deal with consumers who will trade expensive cellphone minutes for free voice-over-Wi-Fi calls via hot spots.

Survey on mobile TV

comScore has published the results of a study analyzing Americans' usage of, and attitudes toward Mobile TV. The study, based on a survey of more than 2,000 mobile phone users, revealed that nearly two out of three Mobile TV subscribers are male and that nearly half are below the age of 35.

Mobile TV Most Popular Among 25-34 Year Olds
Forty-six percent of those who currently subscribe to Mobile TV are below the age of 35 and 65 percent are male. Males were also more likely than average to be interested in Mobile TV, while females were more likely to report being not interested.

Verizon V-Cast Leads in Product Awareness
As part of the study, comScore asked consumers about their awareness of various Mobile TV services. Verizon V-Cast generated the highest overall awareness, with 22 percent of respondents indicating they were familiar with the service. In comparison, 9 percent were aware of MobiTV and 3 percent were aware of Modeo. Among those who currently subscribe to Mobile TV, awareness was substantially higher for Verizon V-Cast (43 percent), MobiTV (34 percent), and Modeo (15 percent).

Consumers Want Traditional TV Content on Mobile TV
Overall, consumers would prefer to watch traditional-style Mobile TV content rather than modified or specialized content. Fifty-six percent of respondents would prefer to watch the "entire TV show" rather than a condensed version and 53 percent favored general content (such as news) over focused content (such as extreme sports programming). However, of those who currently subscribe to Mobile TV, 46 percent prefer general content to focused content and 43 percent prefer entire TV shows to condensed TV shows. Those interested in Mobile TV preferred local news, dramas, movies and sitcoms above other content.
Primary Motivator in Subscribing to Mobile TV Service is "Cost of Service"
comScore also questioned consumers about their top considerations in selecting a Mobile TV service. Not surprisingly, approximately 71 percent of the respondents said that "cost of service" was a top consideration. However, 67 percent of respondents who are interested in subscribing to Mobile TV also said that they would be willing to watch sponsored advertisements in return for free subscriptions, while 64 percent also favored a test period before committing to a subscription.
Americans also indicated that they place a high value on the quality of the viewing experience when choosing a Mobile TV service. Half (50 percent) said that "picture quality" was very important, while 47 percent indicated the same for "screen size" and 43 percent for "channel reception."

Source -

TRAI comes out with recommendations to curb unwarranted calls by telemarketers

The Telecommunications Regulatory Authority of India (TRAI) has recommended punitive measures and the setting up of a national "Do Not Call" master telephone list to curb unwarranted calls by telemarketers. In its proposal to the Department of Telecommunications (DoT), TRAI has proposed seting up the National Do Not Call (NDNC) Registry, which will be a countrywide database of telephone numbers of subscribers who have opted not to receive unsolicited commercial calls (UCC).

Once the rules are finalized, TRAI has mandated telecom service providers to set up a mechanism - call centres or online procedures - to receive requests from the subscribers who do not want to receive such calls a statement issued by TRAI said.
It has also approached DoT to authorise the National Informatics Centre (NIC) to undertake the task of designing, installing, operation and maintenance of the NDNC Registry, the expenditure of which will be borne by TRAI itself.

To make the deterrence stronger, the regulator has suggested that violators be made to pay anywhere between Rs 500 and Rs 1000 (12-24 dollars) for every call they make, with more than three such calls resulting in disconnection of phones used by telemarketers.
The clearance from the communications and IT ministry and the Reserve Bank of India will be required for implementing the plan. TRAI's measures come after the Supreme Court, acting on a public interest litigation filed with it in 2006, had banned spam calls and asked the government to form a roadmap to control and curb unsolicited calls by telemarketers.
The court had termed unsolicited calls as an invasion of privacy and had directed the government to safeguard consumer interests.

TRAI's measures are likely to put a large number of domestic business process outsourcing companies, hired by companies to sell credit cards or home loans over the telephone, out of business. Many countries, such as the US and Australia, already have similar legislation to bar telemarketers from calling mobile subscribers.

Mobile banking - Key to success is in developing 'anywhere' applications

In one of my earlier postings I have talked about the synergies whcih the Telcos & banks can enjoy in their operations. I have always been a strong supporter of Telcos (especailly in India) entering into banking sector. For those who are interested the study of South Africa can be helpful where telecom company has entered into banking space. The conditions in India (the number of people having bank account viv a vis tose having mobile/telecom subscribtion) are quiet same as the ones in South Africa. But recently I came accross a survey results on mobile-banking and thought I should share it. The highlights of the survey carried by JupiterResearch (The group advises major U.S. banks, which are working to expand mobile banking offerings, to experiment with services that leverage the mobile channel's characteristics to respond to the needs of three key consumers segments) are -

- people prefer to do their banking either online or in person, with research showing that, despite renewed efforts on the part of financial institutions, overall interest in mobile-banking services is limited.
- Just 8 percent of online consumers who own a wireless device are interested in using mobile browsing to check account balances.

Currently, Wachovia's nearly 6 million customers can use their cellphones or personal digital assistants to check accounts and to transfer funds. The mobile service requires an encrypted user name and password. In addition, the bank launched a third-party mobile banking application with AT&T Wireless and Firethorn that allows bill payment, which wasn't available in the initial Wachovia application. BancorpSouth, SunTrust Banks Inc. and Regional Financial Corp. have also selected Firethorn's mobile banking and payments system.
Visa USA launched its mobile platform in January and has made strategic investments in .mobi, ecrio (for barcode coupons and ticket purchases) and VeriSign (which will support the mobile platform). Rival card company MasterCard Worldwide also has a program that allows consumers to shop or bank with specific credit cards and debit cards via cellphones; users are required to enter a PIN, which assigns a one-time-only password for each transaction.
According to JupiterResearch, when developing mobile strategies, banks should consider the availability of mobile technologies (SMS, mobile browsing and client application) as well as the characteristics of mobile interactions.
"Banks should not offer mobile services that aim to mirror or duplicate the online experience," adds JupiterResearch President David Schatsky. "Online banking brought consumers the convenience of banking anytime. Mobile banking can add an anywhere element, but banks should identify where such ubiquity is crucial." To no surprise, his company identifies younger consumers as potential early adopters of mobile-banking services. Other interested demographics include consumers who already use mobile browsing as well as "under-banked" consumers who might not be banking online.

Sony Erricsson's handset profits up, Motorola reported loss

As per media reports, Sony Ericsson Mobile Communications quarter 1 earnings for 2007 has more than doubled on strong sales of its "Walkman" music-capable handsets. Sony totally outclassed its larger rivals Nokia and Motorola, which had reported reduced profits and a horrid little loss, respectively.
Net profit for Sony Ericsson was $346 million in the first three months of the year, up from $148 million in the same period last year. Sales soared 47 percent, to $3.99 billion from $2.7 billion in the first quarter of 2006. Units shipped in the quarter reached 21.8 million, a 63-percent increase from the 13.3 million shipped in the first quarter of 2006, although considerably fewer than the 26 million phones shipped in the final quarter of last year.
The lesser performance came despite a decrease in average selling prices (ASPs), from $202 per unit in the first quarter of 2006 to $182, reflecting the company's thrust into developing markets.

In the year 2007 global handset market sales of more than 1.1 billion units is forcasted.
In the worst showing of the week, Motorola reported its first quarterly loss in three years ($181 million), hurt by costs and stumbling sales. The company's worldwide market share for handsets dropped to about 17.5 percent, down from 22 percent in 2006.

BSNL loosing fast on 7000 Cr PCO market

As per an article in economic times - "Years after acting as the original harbingers of the telecom revolution, the yellow and black brand ambassadors of BSNL and MTNL have started losing out to the fancier red and blue phone booths of private operators. The change has been so dramatic that with private players collectively commanding 56% share of the Rs 7,000-crore PCO market. PCO owners have been moving away from the state-owned telecom companies for a number of reasons such as inadequate marketing, legacy networks and less enticing commissions. According to a survey conducted by the telecom regulator Trai, BSNL saw a reduction of 10,518 PCOs during the quarter ended December 31, 2006, while the number for MTNL was 1,543. At the same time private operators are rapidly adding to their numbers with Tata TeleServices (TTSL) adding 81,239 and Reliance Communications adding 1,20,855 PCOs during the same period. Other private operators like Bharti Airtel, HFCL and Shyam Telelink have also been growing their PCO business in recent times. What makes the slump even more painful for government companies is the fact that this is both an extremely fast growing and lucrative segment in the telecom space. The October-December 2006 quarter saw a total addition of 1.83 lakh new PCOs, taking the total number of PCOs in the country to over 53 lakh. But more than volume growth it is also a high-value business. TTSL business access unit head Vikas Shah points out that the average revenue from a PCO is almost four times the blended ARPU (average revenue per user) from a mobile subscriber. The Tatas-owned telco plans to triple the revenues from the PCO business. The segment contributed around 25% to its revenues in FY07 and is expected to go up to 30% this fiscal. "

The CTO of an Indian telecom operator can't be a foreigner ?

As per a news item reported in economic times "The government on Thursday notified the enhancement of foreign direct investment (FDI) in telecom from 49% to 74%. All companies have been given three months time to comply with the revised norms and thereafter compliance reports will have to be submitted on a six-monthly basis. The notification follows the Union Cabinet’s approval of the 74% FDI cap in March, after over 18 months of dithering on the issue. While FDI up to 49% will continue to be on the automatic route, it would require the approval of the Foreign Investment Promotion Board (FIPB) if the limit were to cross 49%. FIPB is also empowered to note that the investment is not coming from countries of concern or unfriendly entities, the government said in a statement. As reported earlier, the Cabinet when clearing the new guidelines had incorporated a series of additional norms, especially on the controversial issue of remote access (RA), to address the concerns of security and intelligence agencies as well as the defence ministry. The provision for RA will allow network majors such as Motorola and Ericsson to monitor the networks of Indian operators from locations outside the country. The Cabinet had cleared all other outstanding issues, except RA, pertaining to 74% FDI in telecom during a meeting on December 8, 2006. The guidelines allow foreigners to hold key positions like chairman, MD, CEO and CFO of telecom companies, subject to clearance from the home ministry on an yearly basis. However, majority of directors on the board will have to be Indian citizens. Besides, the chief officer in charge of technical network operations and the chief security officer have to be resident Indian citizens. Additionally, for security reasons, domestic traffic, which is identified by the licensor, cannot not be hauled or routed to any place outside India. Service providers are also required to take adequate and timely measures to ensure that the information transacted through a network by the subscribers is secure and protected. According to the guidelines for RA, telecom companies can extend this provision only from certain approved locations with prior approval from the department of telecom and other security agencies. Operators should keep an audit trail of all RA activities for a period of six months and these must be provided on request to the DoT or any other agency authorised by the government. Besides, telecom companies must also keep mirror images of such RA activities for online monitoring and provide the same to security agencies on request, and the provision of RA cannot be used for monitoring of content. The guidelines also stipulate that under no circumstances, should RA be used for lawful interception of sensitive voice and data which are specified by the government. Additionally, it also states that RA can only be provided to telecom equipment suppliers and manufacturers and the parents and affiliates of the licensee company. For extending this facility to any other company, prior approval of the DoT is required."

Can 2 billion mobile users become 2 billion TV users?

Fifty-three percent of Internet users say they would replace their cable and satellite TV with broadband TV if they could get the same channels.
A new Zogby poll, sponsored by Redback Networks (an Ericsson company) asked 1006 Americans how they use broadband services, Internet-connected mobile devices and what video and mobile services they would pay for in the future. Here's what they said:
>>53 percent of Americans would replace cable and satellite with broadband TV
>>88 percent believe video cellphone calls will become reality within five years
>>64 percent of parents would subscribe to mobile TV in cars to entertain kids
>>74 percent believe a video-centric Internet may be more dangerous for kids
>>55 percent say parents and individuals are responsible for making broadband technology safe
>>75 percent agree it is rude to use a BlackBerry or similar device in a meeting or restaurant
>>70 percent believe people can become "addicted" to using a BlackBerry or similar device
>>80 percent agree it should be illegal to use Internet mobile devices while driving
>>29 percent believe parents have primary responsibility to make Internet devices safe for kids
>>12 percent say they either had or nearly had a car accident checking e-mail on their BlackBerrys
>>5 percent confess to checking e-mail on mobile Internet devices in the bathroom

"These findings help illustrate how people use broadband and mobile devices today and what they anticipate doing in the future. This poll makes it quite easy to imagine a world where all TV and movie content is portable, and 2 billion cellular users become 2 billion TVs or 2 billion TV broadcasters," says Alan Lippman, chief video architect at Redback Networks, and one of the original creators of Real Audio and Real Video 10 years ago. "Within five years, broadband will be as video-centric as your cable or satellite service, and telephone and high-speed mobile networks may emerge as alternative platforms for triple-play services, delivering greater choice to consumers. There also are emerging revenue opportunities for broadband carriers who meet increasing demand for parental-control services."


AT&T's IPTV service picking up

AT&T's nascent IPTV service, U-verse TV, is now picking up. The subscribers are being hooked up at a pace of 2,000 per week, five times its average rate in January. A rollout into the massive Los Angeles market is now imminent. In total, the company now has 18,000 U-verse TV subscribers.
The current state of the U-verse rollout is roughly what had been expected to be the status in the middle to end of last year, with estimates now that the program is running perhaps six months late. Neither AT&T or Microsoft have ever admitted to the reasons for the delays. Indeed Microsoft has denied reported middleware problems, and AT&T has insisted that upgrades in its network hardware were business as usual, and not something prompted by its discovery that U-verse TV wouldn't work on much of its older network links.

Many in the industry are watching with interest to see how the Microsoft TV installation scales as more and more subscribers sign on. U-verse offer more High Definition channels than local cable companies in the markets and has the ability to record up to four programs at once, and the ability to set DVR recordings remotely using the AT&T Yahoo! portal or, soon, a mobile device.
Microsoft has announced that it had signed up a raft of additional suppliers with technologies that support its IPTV software. That list includes AMD, Intel, Pirelli Broadband Solutions, Sun Microsystems and Thomson.

The Top 10 Asia Pacific Operators in 2006

Over the last few quarters there has been little or no change at the top of the list of the Asia Pacific region's largest operators. China Mobile is still the number one and is still by far the largest mobile operator in the world, with the best part of 300m customers as at December 2006. However, this is not to suggest that the Asia Pacific mobile market is anything other than highly dynamic - five of the ten largest companies in the region were not in the top ten last year and two were barely in the top 20.
The main difference between this year and the end of 2005 is the appearance of no fewer than five companies from the Indian sub-continent, four of them from India itself.
At the end of December, as noted, China Mobile headed the list with 299.9m customers, or 28.7% of the region's 1.05bn total. This, in fact, represents a material loss of regional market share, as one year earlier the number one accounted for over 30% of the region's 817m customers. China Unicom, the world's second largest national operator shared the same fate - but to an even greater degree. It closed the year with a total of 142.4m customers, or 13.6% of the regional total. That's a full two percentage points down on the 2005 figure. This is by far the largest drop in market share in the region and in fact, it is measurable on a global scale - Unicom accounted for 5.86% of 2005's subscribers but only 5.26% of the 2006 total. Only one other member of the top ten - Japan's KDDI - accounted for a declining proportion of the global total year on year.
Japan has two representatives on the list, the aforementioned KDDI and DoCoMo, which is the third largest company in the region. The Japanese number one ended 2006 with 52.2m customers, almost exactly 5% of the regional total. This is a marginal year on year increase, which is mirrored at the global level with a rise from 1.84% to 1.93%. Fourth place is taken by Telkomsel, as it was last year. The Indonesian number one is some way behind DoCoMo, with 35.6m customers, and the main threat to DoCoMo's third place probably comes from further west, from India. Indian companies account for four of the remaining six places and as we shall see in the next section, all are growing dramatically. Bharti is the largest of the four, with 31.97m customers, which gives it fifth place. It was eighth last year. During the last twelve months Bharti has added more than one percent to its regional market share, which has risen from 2.00% to 3.06%. It now has comfortably more than one percent of the global market.

Bharti's growth has been matched by Reliance, which has moved into the top ten from 11th place last year. It ended 2006 with just under 30m customers, or 2.87% regional market share. The next company is on the way down - and perhaps out - of the top ten. KDDI added a fair number of customers to close 2006 with 25.48m, but dropped from fifth to seventh losing relative status along the way. In 2005, it had a 2.60% market share in the region and just under one percent globally; these percentages have now dropped to 2.44% and 0.94% respectively. With numbers eight, nine and ten all growing far faster, a drop to tenth next year seems inevitable. KDDI is helped by the fact that numbers 11 to 16 are all heading in the same (relative) direction.
India's BSNL seems certain to overtake it, if not in the first quarter, then the second. BSNL moved up from 13th to eighth, ending the year with 23.62m customers, for a gain of just under 0.5% in regional market share. However, BSNL's position is not invulnerable and in all probability, it will be overtaken by its national rival Hutch, which Vodafone is in the process of acquiring. Hutch has moved from 16th to ninth, the largest positional gain over the year. It began the period with 1.40% market share and ended it with 2.23%, which equates to 23.3m customers.
Finally, tenth place is taken by Pakistan Mobile, which now has 22.49m customers. It too moved up seven places during the year, but added slightly less to its market share in the process than Hutch.
What of the rest of last year's list? The sub-continentals have relegated them to a position outside the regional top ten and in all probability that is where they will remain from now on. SK Telecom, last year's number six is now eleventh, AIS is down from seventh place to twelfth, Smart has fallen from ninth to 13th and Softbank, the former Vodafone Japan, has collapsed to 16th, after tenth last year. Proportionately, the largest losers were SK and Softbank, which now account for 45bp and 37bp less of the regional market than they did last year.
We should point out here that as at the time of writing we await with baited breath news of the effects of the Indian Department of Telecommunications mobile customer verification procedure. Preliminary figures from CDMA/GSM operator Reliance show that disconnections from unverified accounts amount for 15% of its total base, and the numbers could be worse from the pure GSM companies. However, whilst the Indian operators may fall in the rankings as a result, the cull is a one-off, and there is no doubt that they will quickly recover the lost ground.

50 million 3G subscribers in Asia Pacific Region

W-CDMA was the fastest growing technology in the Asia Pacific region by customer numbers in 2006, as the base using the GSM-derivative 3G standard grew in size by 97% from 24.7m to 48.7m during the year. GSM customers (excluding W-CDMA) grew in number by 29.8% to reach 815m at the end of December 2006. The two technologies in the GSM family together enjoyed customer growth of 32.3%, trumping the CDMA family whose own variants recorded customer growth of 28.4% in aggregate to reach a total of 150.8m.
Given that customer growth in Asia Pacific as a whole was 28.0% in 2006, the result was that CDMA maintained its share of 14.4% of the customer market in the region in 2006. The proportion of the total accounted for by GSM customers saw a marginal increase from 76.8% to 77.9%, whilst W-CDMA customers made up 4.7% of the total at the end of 2006 versus 3.0% at the end of 2005. Giving the slack was largely the Japanese proprietary PDC technology, whose customer base declined 32.7% during the year, although customers of the continent's remaining AMPS, TDMA and other analogue networks also declined, from 0.15% to 0.06% of the total over the period.

Whilst W-CDMA 3G customers stood on the brink of 50m at the end of 2006, 78% of the total was accounted for by Japan alone. Whilst this is an improvement on the 91% registered at the end of 2005, there were still only just over 10m 3G customers in the total base of over 950m mobile customers in Asia Pacific outside of Japan.
Far more numerous were 3G CDMA customers, who numbered 131m at the end of 2006.
What's more only 19% of these customers resided in Japan, meaning that 3G customers using CDMA technology outside of Japan were more than ten times as numerous as their W-CDMA counterparts at the end of 2006. Of course, such claims depend on including CDMA2000 1x variants in our definition of "3G" here, which some argue is incorrect. If we were to exclude this technology and only include customers of the later CDMA2000 1x EV-DO variant, we find on this definition that there were only 28.8m 3G customers using CDMA technology at the end of 2006, of which 12.5m or 43% were in Japan. Of course the reason for the low 3G penetration, by any standard, is that the technology has not yet been launched in many of Asia Pacific's major markets.

However, 2007 should see developments in this area in both China and India, as well as the first full year of 3G service in Indonesia. The chart below shows the development of 3G customers in Asia Pacific so far.

Mobile phone users in India to triple by 2011 ?

As per projections of iSuppli Corp -

A) the wireless service subscriber base in India will rise to 484 million by 2011, more than three times the 149.5 million in 2006. India in 2006 emerged as one of the world's fastest-growing wireless telecom markets, with the number of mobile-phone service subscribers in the nation growing to 149.5 million, up from 85 million in 2005. Monthly mobile subscriber additions averaged 5.5 million in 2006, and exceeded 6 million per month by the end of the year. iSuppli Corp. projects that .
The penetration of wireless technologies remains high in urban areas compared to rural regions, where approximately two-thirds of the Indian population resides. As of December 2006, the urban tele-density had grown to more than 40 percent, compared to rural penetration of little more than 2 percent.

B) The growth in wireless subscribers is fueling explosive growth in demand for new phones in India. iSuppli estimates that the number of total new legal handsets sold in India in 2006 was 69.3 million. As the subscriber base continues to expand, India will emerge as the second-largest market in the world after China for mobile handsets in terms of unit shipments. iSuppli estimates that in 2011, approximately 11 percent of the global mobile device unit shipments will be to India.
The Indian mobile phone market in 2006 was dominated by GSM-enabled handsets with 51.7 million out of 68.9 million handsets being GSM enabled.

C) The replacement cycle for mobile phones varies radically by the type of market. In India, handset usage is primarily a voice-centric affair. Therefore, the replacement cycle is longer. However, as handset features gain prominence, the replacement rate is expected to grow to 25 percent by 2011.

D) The blended mobile-phone services Average Revenue Per User (ARPU) for the Indian market was estimated to be in the vicinity of US$7 in 2006. As growth picks up in the semi-urban and rural areas, there will be downward pressure on ARPU. iSuppli estimates the ARPU will drop to less than US$5 by 2010.
Data services are slowly starting to gain traction in India. However, iSuppli estimates that data ARPU in India will be extremely low for the foreseeable future. This is because although GPRS and EDGE services have been available in India for quite some time, they have met with limited success. GPRS service first was launched in India in February 2002, while EDGE commenced in July 2004. GPRS is widely deployed in India, while EDGE has been rolled out only in major metropolitan areas and in a few other smaller cities.
In the years to come, EDGE subscribers will grow, but will remain a limited portion of the total subscriber base, iSuppli concludes.

BSNL added over 19.8 lacs GSM subscribers in March 2007

India's largest telecommunications operator by number of subscribers Bharti Airtel has added 1.70 million mobile phone subscribers in March, industry data showed Wednesday.
With this, Bharti's mobile phone subscriber base has reached 37.14 million users, data released by the Cellular Operators Association of India, the body representing all the nine mobile operators using GSM technology, showed.
State-run Bharat Sanchar Nigam Ltd. added the largest number of mobile phone subscribers in March at 1.98 million to take its total subscriber base to 27.43 million.
Hutchison Essar Ltd., in which U.K.'s Vodafone Group recently bought a 52% direct stake, reported an addition of 1.1 million mobile phone users to take its total subscriber base to 26.44 million users at the end of March.
Recently listed Idea Cellular showed a slowdown in growth by adding 370,551 subscribers in March against 568,051 mobile phone users added in February.
The statement didn't give reasons for the slow growth.
Idea's subscriber base at the end of March was 14.01 million cell phone users.
Mahanagar Telephone Nigam, another state-run telecommunications company providing services in New Delhi and Mumbai, added 167,992 mobile phone users to take its subscriber base at the end of March to 2.75 million.
All the nine operators using GSM technology put together a reported addition of 6.13 million mobile phone users in March, with the total subscriber base at 121.43 million GSM mobile phone users.

TRAI recommends network infrastructure sharing

The Department of Telecommunication had sought recommendations from TRAI on effective sharing of passive infrastructure (towers etc.). The Telecom Regulatory Authority of India (TRAI) says that it is supporting plans to allow network infrastructure sharing in India. Given the significance of infrastructure sharing the Authority says that it not only considered the issue of passive infrastructure sharing but has given the recommendation regarding active infrastructure sharing and backhaul on a suo-motu basis.

TRAI says that the country would require approximately 330,000 towers by 2010 against the present number of approximately 100,000 towers. Apart from huge investments needed the time taken in roll out could be a major bottleneck in the achievement of 500 million subscribers by 2010. Even if the target is achieved it will only be about 50 per cent of the tele-density with major gaps in the rural areas.
In its recommendation, the Authority has reiterated the urgency of passive infrastructure sharing. The Authority does not prefer any mandated passive infrastructure sharing but has required that the entire process should be transparent and non-discriminatory. The mode of commercial agreement has been left to the telecom service providers but it has reserved the option of prescribing a standard commercial agreement format in future if the process of infrastructure sharing does not become a pattern of planning in the schemes of telecom service providers.
In another major recommendation the Authority has sought amendment in the license condition to allow active infrastructure sharing limited to antenna, feeder cable, Node B, Radio Access Network and transmission systems.
However, the Authority has not favoured sharing of spectrum at this stage.
Another major initiative is backhaul sharing. Considering the importance of backhaul sharing for mobile services in rural and far-flung areas, the Authority has recommended amendment in the license conditions to allow service providers to share their backhaul from Base Trans Receiver Station (BTS) to Base Station Controller (BSC). It has noted that such a sharing is permitted on optical fibre as well as radio medium at certain 'nodes'. However, no sharing of spectrum at Access Network side has been recommended.
In order to provide level playing field and roll out opportunities to all the licensees, the Authority has expanded the scope of financial incentive for passive infrastructure sharing in rural and far-flung remote areas. Accordingly it has recommended that all the licensees in any service areas should qualify for financial subvention schemes meant for rural areas though at reduced scale compared to the winner in the tender process of USOF Administration. The Authority has also recognised the need to encourage use of non-conventional energy sources and has recommended to the DOT to finalise suitable schemes in consultation with the concerned Ministry so as to resolve the critical power availability issue.

Source -

Hutchison Essar Planning US$2 Billion GSM Network Tender?

India's Hutchison Essar is reported to be pressing ahead with a tender for GSM equipment which could be worth as much as US$2 billion. The tender is expected to go ahead, even though the problematic purchase of a majority stake in the firm by Vodafone is mired in controversy about India's cap on foreign shareholder.

The company would roll out extra capacity in the existing 16 circles (licensed areas) and was also factoring in the proposed launch of operations in six Spacetel circles acquired from the Essar group last year. Spacetel has a letter of intent from the Department of Telecom to operate in North East, Himachal Pradesh, Bihar, Orissa, Assam, and Jammu and Kashmir where Hutchison Essar is not present.
Hutchison Essar ended last year with some 23.3 million subscribers, giving the company a market share of just over 16%.

Source - Economic Times

Telecom New Zealand (TNZ) opposes Governments plan to split it into three companies

Telecom New Zealand (TNZ), the nation's dominant carrier, proposed selling off its copper-line network rather than submit to a government- imposed scheme that would split the company three ways.
The government plan supposedly is designed to foster competition, but TNZ says it would destroy the carrier. TNZ and the government have been sparring over some sort of restructuring since last summer. The government, in a plan that went to the New Zealand Parliament and was published in a final form last week, wants to chop the company up into a trio of units - wholesale, retail and the copper-wire telephone network - all of which would remain part of TNZ. This scheme will be forced on TNZ by 2010. In theory, the New Zealand government's plan is based on what happened to BT in the U.K.

TNZ Chairman Wayne Boyd unveiled TNZ's plan to simply sell off its copper lines. It could cost TNZ more than $240 million to implement the government plan, forcing it to hire 700 extra workers plus incurring substantial ongoing costs.
Instead, Boyd proposed that TNZ simply sell off its copper network, which reaches 1.4 million of New Zealand's 1.7 million households. what price TNZ might expect to get for the network, which is said to have a theoretical book value of $1.5 billion remains a question mark. One possibility floated was also that, rather than selling the network, TNZ would instead cut it in half, creating a separate company with existing TNZ shareholders receiving pro rata shares in the new company.
According to TNZ, selling the network will create "a structurally separated access network company that would have the ability to earn a commercial rate of return, a simpler separation model so resources can focus on faster delivery of local loop unbundling and naked DSL, downstream de-regulation to enable telecom retail to compete and innovate, and committed broadband network investment from telecom."
Boyd also argued that the government plan took no account of emerging fiber technology, which is replacing copper and which would leave TNZ with a network unit that couldn't compete in the emerging environment.

Banks and Telcos - Partnerships of future?

Reports from Italy suggest that a group of local banks are looking to form a consortium which would become the largest shareholder in the country’s dominant telco, Telecom Italia. Intesa Sanpaolo and Mediobanca are hoping to gather together other local investors to win control of up to 29.9% of the operator, local business daily Milano Finanza reports. The consortium may include AT&T Inc and América Móvil, which are looking to take 33% each in Olimpia, a holding company which has an 18% stake in Telecom Italia; the Olimpia stake is being sold by Italian industrial group Pirelli.

Banking and Telecom services can reap in wonderful partnerships. Does this gives hint for other Telcos or service providers?

Emerging trends in mobile advertising and marketing

Recently released study from ABI Research projects the mobile advertising and marketing market to reach $3 billion by end 2007 and expand to $19 billion in 2011.
As per the study - "Mobile advertising and marketing is a risky, albeit enticing business Unlike the PC, a mobile device offers a uniquely personalized communications channel. Carriers worldwide have quite a bit of information about their end-users: name, sex, age, geographical location. And depending on the handset and plan their users have purchased, the carriers probably also know something about their economic status and credit record. But they don't like to release this information to third parties because they want to protect and control their customers,"
However, early-adopting brands in the US are still in the process of testing the water. They don't typically allocate a set percentage of their annual budgets to mobile. In turn, major ad agencies are still relatively inexperienced with mobile marketing campaigns, and reluctant to utilize location-based services and technologies such as MMS (Multimedia Messaging Service) and mobile search that are still in the early stages of deployment. This new study also indicates the reluctance of major ad agencies to maximize mobile advertising as part of their campaigns. But they have to rethink the way they do business considering the current market landscape composed of people who are dependent, to a point addicted, on their mobile phones for daily survival.

Gaming applications spinning money for Japanese Telco

KDDI's wireless data service, powered by BREW, continues to spur the demand for mobile applications in the Japanese market. In January 2007, KDDI subscribers downloaded more than seven million BREW applications to their mobile phones. The cumulative number of BREW application downloads is now more than 160 million since KDDI first launched BREW in February 2003. Gaming has proven to be one of the most active areas of mobile downloads. According to KDDI, its catalog of high-quality mobile games has grown from 2,000 applications in January 2006 to more than 3,000 gaming applications in January 2007.

Are the telcos ready for the next revolution of the information age - Mobile TV

Leading research firm Gartner predicts that Mobile TV will be an opportunity for operator to replace dwindling voice revenue. Mobile TV will become a mainstream service in most developed markets by 2010 with close to half a billion subscribers worldwide.
The marketplace for mobile TV will vary widely by country and will be shared between TV services that are delivered via cellular and broadcast methods. TV services over cellular will grow from 38 million users in 2007 to 356 million in 2010. TV broadcasting will reach 133 million subscribers by 2010 - due in the main to the growing availability of broadcast-enabled phones - with Japan as the region leading the way followed by Western Europe.

The uptake of mobile TV services will grow at a considerable rate over the next few years, but most subscribers will receive mobile TV as part of their mobile subscription, Garner says.
Gartner estimates that only 30 percent of the total number of mobile TV subscribers will ask for the service while 70 percent will receive it as part of their service bundle.
The bundling of Mobile TV services together with questionable early demand for premium content and advertising-funded free TV services will mean that in the short term at least, revenue from mobile TV will be depressed.

In the long run however Gartner predicts that it still has the potential to be a major overall average per revenue per unit (ARPU) component.
Gartner expects TV services over cellular to show revenue of just over USD 100 million in 2006, growing to USD 15 billion by 2010. said Ms Milanesi. Revenue from broadcast TV will grow from USD 200 million to 10.8 billion over the same period.
Consequently, Gartner is advising operators to consider revenue models for mobile TV carefully. According to Ms Milanesi, rather than competing on tariffs, they should instead focus on creating a unique ‘Mobile TV experience’ in order to attract an increasing number of subscribers.

“The most successful operators where mobile TV is concerned will be those that treat it as a long-term opportunity, not a quick fix.”

Mobile TV Subscribers, Worldwide, 2006-2010
Transport Cellular Broadcasting Total
2006 10 942 000 5 972 500 16 914 500
2007 37 76 700 21 872 300 59 640 000
2010 356 058 700 132 692 800 488 751 500

Source: Gartner

Japan to have 50m wallet phones by 2010

Eurotechnology Japan KK estimates that within this year about 30 million phones in Japan will be wallet phones which can serve as electronic cash, mobile credit cards, ATM cards, apartment keys and train tickets.
The consulting house predicts that if current adoption rates continue about 50 million wallet phones be in the hands of subscribers in Japan around 2010.
Wallet phones are likely to change the face of the credit card industry, and create new industries. This impact is only starting now.
Eurotechnology Japan calls wallet phones innovation and disruption for established industries, such as credit cards.
Wallet phones in principle can take over all functions, which our wallet has. Wallet phones enable mobile operators to enter new industries, especially the payment and credit card industries.

Telcos in Chaina and Germany face union problems

Executive members of the state-run Chunghwa Telecom Co. Workers' Union have charged that telco's management of ongoing "inhumane" worker layoffs aimed at cutting costs. At the same time in Europe a German labor union sanctioned brief walkouts in protest of plans by Deutsche Telekom to institute longer hours and lower pay for thousands of workers.

In China, protesters demanded that the Ministry of Transportation and Communications (MOTC), which holds a 36-percent stake in Chunghwa, should replace its designated chairman, Ho Chen-tan. Workers claim Ho has resorted to "inhumane" means "of all kinds" since 2006 to lay off workers in order to "please" foreign investors. If Ho is not replaced, the union threatens to mobilize 5,000 workers to protest at the ministry headquarters May 1.
According to the workers union, some 1,600 workers were scheduled to be pink-slipped this month, with Chunghwa Telecom Workers' Union Secretary-General Chuang Ping-tang saying the carrier has a "layoff quota" that includes forcing "targeted" workers to quit by changing work schedules and duties with no prior notice. Apparently, anxiety is so high among Chunghwa workers that one generator-room technician committed suicide last year.
Chinese legislators have criticized highly profitable carrier ($1.2 billion last year) for violation of an agreement it signed with the workers' union in 2005 when it began the process of privatization. That agreement stipulated that no workers were to be laid off during the first five years of privatization.

In Europe, some 1,000 call-center representatives and technical-service members of Germany's ver.di service workers' union, located at six Deutsche Telekom sites, staged brief "warning strikes" lasting for one shift in protest of the incumbent's proposed plan to transfer as many as 50,000 staffers to a new service unit, called T-Service. (Apparently, these targeted mini-strikes are used by German unions to show they mean business while not disrupting business too much.) Workers claim the carrier plans to amend workers' labor contracts to secure more hours at less pay.
Last month, Deutsche Telekom announced that, effective July 1, its call-center activities, technical customer service and operative units would be "integrated in three units." In the collective bargaining, which is beginning now, Deutsche Telekom is seeking to negotiate service-oriented employment conditions with ver.di and a payment structure that is in line with the market. In return, Deutsche Telekom has signaled its willingness to make an early extension to the agreement to avoid compulsory redundancies, which expires on Dec. 31, 2008.
As such, the carrier wants to increase the work week from 34 hours to at least 38 hours. Gradually, and in a socially considerate manner, pay levels are also to be moved closer to the market level.

Erricsson aims growth via multimedia division

As per an interview given to the Svenska Dagbladet newspaper, a Swedish daily, Ericsson CEO Carl-Henric Svanberg has said that he sees more acquisitions on the horizon to grow the firm's multimedia division. He said that networking equipment will continue to be Ericsson's largest business over the next five years. Recent acquisitions include a Norwegian digital broadcast systems maker and an IP messaging components company. Svanberg is quoted saying, "There will be more acquisitions on the multimedia side. We do not need to take a breath just because we have made several acquisitions." In addition, he said the Alcatel-Lucent merger has helped Ericsson with the merger of two competitors in one.

Japan's Telecom operators changing strategy in wake of MNP & Content based applications

From paying for an air ticket to buying a drink from a vending machine or watching TV on the subway, using a mobile phone is very much a part of everyday life for people in Japan.
Japan's dominant mobile phone operator is NTT DoCoMo and with 94 million handsets for a population of 127 million, Japan has the highest ratio of mobile phones to people in the world. DoCoMo has more than 55 percent of the market.
DoCoMo's I-mode (the one-touch mobile Internet service pioneered in Japan in 1999) was a great success. Getting people to use their phones as electronic wallets, as keys to the their front door, as health monitoring devices and as entertainment gadgets with a vast array of functions is the revenue-driven goal for DoCoMo and its key competitors in the mobile field, second-ranked KDDI and the upstart Softbank Mobile, the former Vodafone outlet now controlled by Internet billionaire Masayoshi Son.

The pressure is on for all three companies, following the introduction in late October of mobile number portability (MNP), allowing Japanese users for the first time to switch carriers without having to give up their existing phone number. Analysts suggest as many as 8 million users will switch and another 34 million are considering a change. But one argument put forward against a big switch is the need for customers to change their phone-based e-mail addresses, which are linked to the respective carriers.
In the marketing blitz associated with MNP in Japan, all three carriers have rushed out new handset models and new payment plans, with Softbank Mobile unveiling the most aggressive options that include waiving initial handset costs and undercutting its rivals' monthly fees.
Average revenue per user (ARPU) runs at about 6,900 yen (about $60) a month for DoComo, 6,800 yen for KDDI and about 5,600 yen for Softbank.
As the mobile commerce market is moving to the next stage of retailing, distribution and financial services the operators will require a new business model.
In the past, the focus was on increasing traffic and ARPU. But now, DoCoMo's goal -- and that of its competitors -- is to create alliances across a range of services.
One example is credit, via a mobile wallet embedded in the handset. That will require a partnership with a financial services company. Another is mobile television and music video clips, which may see the phone companies linking with broadcasters and other media providers.
Already, consumers are happy to use their phones in commercial transactions. It is common to see teenage girls on the subway, bidding for the latest cosmetics on Internet auction sites.
Another popular download service is for romance serial novels -- light fiction that can be read quickly on phone screens while commuting. And in the not-too-distant future, virtually every convenience store in Japan will offer a scanner that allows goods and services to be bought via direct debit from a phone.
Not all the new mobile services necessarily will involve competition among carriers. In disaster response mode and possibly in providing community service obligations such as remote health diagnostic services, it may be that DoCoMo, KDDI and Soffbank will work together.
Certainly, the Japanese experience is that consumers are prepared to use their phones for a variety of services, from ring tones to restaurant locations. But one key issue is the level of security surrounding their personal data. If a phone is lost or stolen, for example, how vulnerable is the information on the phone?
On the security front, it is envisaged that while handsets will offer an increasing array of functions and carry a lot of personal information, the most vital data will be protected by staying on the network's servers, rather than handsets.
Whether consumers will accept these assurances on data protection is one of the challenges ahead for carriers in the world's most upwardly mobile society.

Idea cellular signs a ten year IT outsourcing contract with IBM

IBM has landed a ten-year IT outsourcing contract worth an estimated $600-$800 million from Idea Cellular, India's fifth largest cellular carrier. The exact value is based on Idea revenues, and could potentially grow into the billion dollar range. The deal is believed to position IBM as the number one player in telecoms IT outsourcing in India. If follows a somewhat similar 10-year revenue-sharing deal it snagged in 2004 from mobile market share leader Bharti Airtel Ltd. to manage its core IT infrastructure. That deal was estimated at $750 million when it was signed but, with the Indian cellular market literally exploding estimates are now that it may be worth $1.5 billion to IBM.
Idea had 13.6 million subscribers at the end of February, compared to Bharti's 35.4 million. However the deal with IBM looks to be more extensive than the one signed by its bigger rival. In addition to managing Idea's IT infrastructure, the pact calls for IBM to do an "end-to-end transformation" of Idea's business critical processes including billing, revenue assurance, and credit collection, subscriber management, business intelligence, fraud management, customer relationship management, e-billing and payment, and customer self care.
If all goes as planned, Idea hopes that hiring IBM will spur its growth and, the two companies said, IBM's incentive to see that happen is that the fee it receives is based on a "risk reward" revenue sharing plan. Details of that formula were not disclosed, but IBM will apparently win its biggest payoff if Idea beats a set of revenue predictions included in the contract between the two.
The move to hire IBM comes as Idea begins an aggressive rollout, funded by its recent IPO in which it raised $500 million.
At IBM the Idea contract is part of an effort to win more business within India, where it now employs about 53,000 people - second only to the U.S. where it has around 125,000 workers - and is investing $6 billion over the three years through 2009 to expand service centers in the country. However most of the business at those service centers is from global accounts. Sales to companies in India currently account for less than 1 percent of IBM global revenue.

Ofcom, the UK regulator comes out with rules for VoIP telephony

U.K. regulator Ofcom has handed down its first set of rules for VoIP telephony - what it is calling a "code of practice" . The rules apply to "softphone" VoIP calls from PCs, such as those between Skype and landline users (via the SkypeOut service), as well as to calls using broadband-connected VoIP adapters and standard phones. In addition to Skype, which is thought to be as wildly popular in the U.K. as it is in most of Europe, major VoIP players in the U.K. include everyone from pure VoIP player Vonage to incumbent BT and major challengers such as France Telecom's Orange and Tesco.

Ofcom said that "the new code of practice requires VoIP providers to make clear:
>>Whether or not the service includes access to emergency services;
>>The extent to which the service depends on the user's home power supply;
>>Whether directory assistance, directory listings, access to the operator or the itemisation of calls are available; and
>>Whether consumers will be able to keep their telephone number if they choose to switch providers at a later date."
In cases where emergency service calls are not available - which in the U.K. is believed to me the vast majority of VoIP service - providers are being required the get consumer's positive written acknowledgement that they have been so informed. Ofcom suggested that getting them to check off a box on their service order could have that effect. VoIP providers also have to put stickers on VoIP phones warning users they can't make emergency calls and, should they try, have a recorded announcement to that effect. For softphones the warnings have to appear on the PC screen. Similar rules cover the issue of loss of service in a power outage.

Ofcoms' regulations hardly come as a surprise to the VoIP community. VoIP service providers had been fighting for years against Ofcom establishing any rules, a battle they have now lost. Ofcom began considering VoIP rules as far back as September 2004, the regulator noted in its ruling. A little over a year ago, in Feb. 2006, the it put forth its proposed rules.

While imposing its first regulations on VoIP, Ofcom also very carefully indicated its general approval of the emergence of the technology.
"VoIP services offer consumers the prospect of cheaper calls - especially for calls from one VoIP service to another - and valuable new services such as call handling and unified messaging," Ofcom wrote in its ruling announcement. "Over the last twelve months a range of new VoIP services have been launched and demand continues to grow."

The regulator also cited industry estimates that, by the end of this year, there will be some 3 million VoIP users in the U.K. That estimate may be quite low, and may not include softphone users such as those on Skype and Microsoft Messenger. In January BT put out a statement bragging of its one millionth VoIP customer, for instance, saying it hit the target a half a year earlier than it had expected.

With 341 FTTH service providers, USA leads Japan in Fiber-to-the-Home growth rate

According to a new study jointly released by the Fiber-to-the-Home (FTTH) Council and the Telecommunications Industry Association (TIA), the number of homes hooked up directly to fiber has nearly doubled during the past year in USA.
The study, says that nearly 8 million homes now are passed by fiber, up from 4 million a year ago. Of those, 1.3 million are connected to the fiber, better than double the 671,000 that were connected in March 2006. Verizon's FiOS remains the leader of the U.S. FTTH business, accounting for nearly all of the 899,500 homes connected to fiber by incumbent local exchange carriers (ILECs). According to study, there are 341 other U.S. FTTH providers, each with an average of 1,249 connections. In fact, small rural telephone companies are actually leading the way in terms of penetration - with 3 percent of their combined customer base now connected via FTTH.
The study however did not discuss the issues surrounding the speed of Verizon's FTTH rollout that, by many estimates, is moving more slowly than had once been planned.
The research firm also notes that, while Japan has more FTTH connections than does the United States, the growth rate in America now is higher.

Major deregulatory changes in Telecom sector in Canada

Canada's Government has ordered the immediate deregulation of a majority of the Canadian phone industry. Canada's major telco's have been given the right to launch a battle to regain customers lost to both pure-play VoIP houses and cable companies offering VoIP services. Predictions are for a price war in very short order. Bell Canada is said to have lost 181,000 subscribers to VoIP-based competitors in the latest quarter alone, and Telus may have lost 31,000.

The orders have been issued despite opposition from Canadian regulator the Canadian Radio-television and Telecommunications Commission. The commission had passed its own set of "market-based" rules covering the regulation of voice carriers. But Canadian law gives the minister the ability to overrule the CRTC.

Under the new rules, a telco will only have to show there are three different competitors offering phone services, including wireless, in a given residential market or two in a business market, in order to apply for the deregulation of its rates. The CRTC then has a limit of 120 days to act on the applications. Previously, telcos had to prove they had lost 25 percent of their customers before their rates could be deregulated. The new rules also eliminate the so-called "win-back" restrictions the CRTC had imposed, forcing phone companies to wait three months before trying to lure back customers who had defected.

Canada's New Government is pursuing an ambitious policy agenda for the telecommunications sector, the essence of which is a new regulatory framework that is more modern, flexible and efficient.

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