Random thoughts on the telecom industry
The Indian telecom industry is an extremely action packed one right now, and has been so for the past couple of years. The mobile telephony market has exploded at an exponential rate of growth and the industry as a whole is adding over 2 million subscribers month on month. With a lot of technological advancements expected over the next couple of years, things really look exciting in the near term.
3G is obviously the next big thing everyone is talking about. Today, we experience internet over the mobile phone using a technology called GPRS. GPRS has limitations in terms of the browsing speed it offers. This limitation in turn imposes a restriction on the kind of applications that can be brought on the mobile phone. 3G promises to remove this barrier and allow a whole lot of content-rich applications to be brought on the mobile platform. So video on-demand, mobile gaming etc are some of the applications we can expect to catch on big time. For the enterprise, mobile enablement of the sales / service force will reach a whole new dimension. Bandwidth intensive applications could help people remain out of office and be just as productive.
Indian customers currently enjoy the lowest telecom tarriffs in the world. While competition ha splayed a vital part in making this possible, companies have realised that the only way to ensure profitability is to reduce the 'cost to produce a minute of talktime' - simply called 'cost of minutes'. Network infrastructure is a huge capital expenditure and even small percentage savings here have a direct bearing on the bottom line. With every network operator having realised that outsourcing the network management is the best way to focus on acquiring customers, the cost of outsourcing becomes critical. Traditionally, all networkoperators have relied on the frontrunners in telecom technology - the Nokias, the Ericssons, the Nortels and the Lucents of the world. Of late, chinese companies like Huawei and ZTE are turning the markets on their heads with their aggressive pricing strategy. They often quote tenders at prices which are below the cost price of the frontrunners!!! This strategy is affecting the existing players so badly and the effects are there for all to see - Nortel has already filed for bankruptcy protection. Buzz is that a couple of other major telecom vendors are next in line. If Huawei is thriving on a 'reverse engineering' strategy wherein they don't incur R&D costs which the European and American companies do, then I wonder what would happen if Huawei is the only company left!!!! Where would the product ideas and designs come from?
I would like to include IPTV, VoIP and Number Portability also, but that would be a separate article as this one's become quite lengthy!!!
3G is obviously the next big thing everyone is talking about. Today, we experience internet over the mobile phone using a technology called GPRS. GPRS has limitations in terms of the browsing speed it offers. This limitation in turn imposes a restriction on the kind of applications that can be brought on the mobile phone. 3G promises to remove this barrier and allow a whole lot of content-rich applications to be brought on the mobile platform. So video on-demand, mobile gaming etc are some of the applications we can expect to catch on big time. For the enterprise, mobile enablement of the sales / service force will reach a whole new dimension. Bandwidth intensive applications could help people remain out of office and be just as productive.
Indian customers currently enjoy the lowest telecom tarriffs in the world. While competition ha splayed a vital part in making this possible, companies have realised that the only way to ensure profitability is to reduce the 'cost to produce a minute of talktime' - simply called 'cost of minutes'. Network infrastructure is a huge capital expenditure and even small percentage savings here have a direct bearing on the bottom line. With every network operator having realised that outsourcing the network management is the best way to focus on acquiring customers, the cost of outsourcing becomes critical. Traditionally, all networkoperators have relied on the frontrunners in telecom technology - the Nokias, the Ericssons, the Nortels and the Lucents of the world. Of late, chinese companies like Huawei and ZTE are turning the markets on their heads with their aggressive pricing strategy. They often quote tenders at prices which are below the cost price of the frontrunners!!! This strategy is affecting the existing players so badly and the effects are there for all to see - Nortel has already filed for bankruptcy protection. Buzz is that a couple of other major telecom vendors are next in line. If Huawei is thriving on a 'reverse engineering' strategy wherein they don't incur R&D costs which the European and American companies do, then I wonder what would happen if Huawei is the only company left!!!! Where would the product ideas and designs come from?
I would like to include IPTV, VoIP and Number Portability also, but that would be a separate article as this one's become quite lengthy!!!
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