Quality Concerns

Year 2009 will present challenges to Indian telcos on multiple fronts. First,

most of the operators will start feeling the heat of economic slowdown. Second,

quality of services will come under stringent scrutiny, thanks to a consultation

floated by Trai. Third, the current regulatory atmosphere, marred by a fight

between operators camps and bureaucrats, and between DoT and Trai, will continue

for some more time.

Operators may succeed in fine-tuning their strategies to improve top and

bottom-line during the slowdown. Recent regulatory developments are the result

of their quest for market leadership.

QoS, which had been ignored by many operators as they were busy acquiring new

users, will now top their agenda. This is because a growing number of users are

not satisfied with services in metros and towns, that are facing near saturation

amid the lack of additional spectrum. QoS will assume more importance as new

telecom licensees will use this as a tool to convince subscribers and grab

market share. Mobile number portability, which is expected to be available to

users in mid-2009, will add fuel to existing operators.

Existing operators are already facing the challenge of retaining subscribers.

According to the Voice&Data-JuxtConsult Mobile Satisfaction Survey 2008,

operators such as Aircel, Bharti Airtel, BPL Mobile, Idea Cellular and Spice

Communications (part of Idea Cellular) did not meet the Trai benchmark of 90%

satisfaction. This is a serious issue and cannot be ignored by the government

and telecom investors.

Quality can be measured on several parameters. But poor network coverage is

an obvious issue. Indian operators must start spending more on network

upgradation in their existing circles. It is important to note that most recent

contracts announced by telecom vendors are for new circles and expansions and

not for upgradation.

The recent consultation by Trai is a welcome step in this context. The

telecom regulator wants to put forward stringent measures to assess QoS. A new

parameter is proposed to assess the metering and billing credibility in respect

of charging pre-paid customers. Presently only post-paid customers' billing

credibility is assessed through QoS regulations.

Operators must respond to the new benchmark positively. Positive response is

a must since quality issues will be more significant for the next 200 mn users

expected to join the network during the next two years.

Despite revenue constraints, operators launched services in rural areas in

2008. 2008 has also seen India overtakethe US as the second larges mobile market

based on user base. If they need to continue their winning spree, operators

should free themselves from the unwanted regulatory discussions, while focusing

on investing in network in 2009.

Baburajan K



baburajank@cybermedia.co.in