Showing posts with label Mumbai. Show all posts
Showing posts with label Mumbai. Show all posts

Friday, February 08, 2013

3G in India

3G in India is clearly too expensive on a rational and logical basis

The impact of the prices paid in India will result in an increase of capital employed for Idea, Bharti and Reliance of roughly 3.0%, 3.4% and 10.4% compared to the 255% increase for Vodafone. The immediate impact on the ROCE is to reduce the returns in the range of 0.2% to 0.9% which is relatively benign compared to the damage inflicted in the UK. Furthermore, unlike the UK, the Indian operators will be able to deploy their networks more cheaply and achieve greater performance by jumping to 3.5G in the form of HSPA. The spectrum will be used immediately to relieve congestion on the 2G voice networks and India will quickly emerge as the centre of innovation for low cost smart phones, applications and new mobile business models. The auction winners will not have to wait 10 years before they can start earning a return. Indian 3G prices for Mumbai, Delhli and Kolkata were certainly high and above expectations but they were not anywhere near as exuberant as those of the UK or Germany.

As regards the business case for the 3G spectrum, the 3G spectrum in India is both about voice and mobile broadband. Accessing the Internet from handsets i.e. the small screen will be a much bigger phenomena in emerging markets compared to developed countries. This is already apparent in some markets such as Egypt, Morocco and the Philippines. What matters now in India is not how much was paid for 3G spectrum, and as a classic “sunk cost” it should have little bearing on future decision making, but how quickly can a more rational market structure be established. Greater certainty over the future regulatory environment, including 2G spectrum pricing, along with consolidation and an end to the brutal price war will have a far more pervasive impact on future returns than the prices paid for 3G spectrum.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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Friday, November 30, 2012

Enemy of the state

Raj is preparing his political 'parantha' in the name of Maratha

It has become easier to break the law in India than to follow it. No wonder then that the goons are having the last say. Beating innocent North Indian students on November 19, who came to appear in Railways exams, was an extension of MNS Chief, Raj Thackeray's efforts to throw out North Indians from Maharashtra and he has proved that he neither fears the law nor does he respect it.

The truth is that North Indians have stayed in Mumbai for decades and are as much Mumbaikar as any Maratha manus. Then why are they being targeted? Says Sanjay Nirupam from Congress, "Whatever Raj is doing is nothing more than an effort to find his place in Maharashtra. Since Balasaheb is no more what he used to be and Udhav Thackeray has proven to be a powerless successor, Raj is trying to gain power by using an aggressive stand against North Indians.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
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