DIGEST/INDIA

Cellular Firms to Tap Rural Market

The government has approved the amendment of the Indian Telegraph Act
to include mobile telecom services in the universal services obligation (USO)
fund. A bill to amend the Act is likely to be tabled in Parliament soon the
Union Information and Broadcasting minister Priya Ranjan Dasmunshi said. At
present, the fund can be utilized by basic operators only. As much as Rs 1,500
crore is earmarked under it for 2006-07.

Bharti Airtel to Go International

Bharti Airtel is now ready to go international. The company is exploring
opportunities to acquire overseas cellular licenses to launch mobile services
under the Airtel banner in key international telecom markets. Among Bharti
Airtel's existing foreign shareholding partners are UK's Vodafone and
Singapore Telecom (SingTel). Commenting on Bharti exiting the telecom business
in the 74% FDI regime, Mittal maintained that telecom would remain the mainstay
of the Bharti group even four years from now. Telecom will generate at least 75%
of Bharti's targeted $10 bn revenue by 2010, he said.

Prepaid Users Under DoT Scanner

Prepaid mobile phone users are under telecom operators' tight
scrutiny, following a government security directive. The service providers have
agreed to take part in a major verification process by deactivating the
connections where proper verification has not taken place. Bipin Batra,
president, Cellular Phone Users Association of India, said that the verification
process started after COAI and AUSPI agreed on the charter points.

Huawei to Invest $100 mn in India

Huawei Technologies will invest a total of $100 mn in its R&D center in
Bangalore for setting up a manufacturing facility, subject to approval. "We
will invest $100 mn for expansion of Indian operations, which will include $60
mn for our plans to set up a manufacturing plant in India for which we have
applied for approval and $40 mn on expanding the Bangalore R&D center,"
said Fu Jun, global spokesperson for Huawei Technologies.

RCoVL's Net Profit Rs 403 crore

Reliance Communications Venture (RCoVL) has posted a net profit of Rs
403 crore on revenues of Rs 2,970 crore in Q1 2006-07, ended March 31, 2006. Net
profit before the extraordinary items was Rs 440 crore. Sequentially, revenues
for the quarter dropped 11% from Rs 3,327 crore since the December 2005 quarter,
despite an all-time high subscriber addition of 3.2 mn. Sequential net profit,
however, has risen 30%.

TRAI on QoS

TRAI has sought the cooperation of service providers, equipment suppliers,
and the government to improve the quality of service. "The quality of
services we have, is sending a negative message among the subscribers. This
needs to be addressed effectively and in a shortest span of time," TRAI
chairman Nripendra Mishra said at a function of Telecom Equipment Manufacturers
Association (TEMA). Endorsing Mishra's view, TEMA president, P Balaji assured
all cooperation from the vendors to meet quality benchmarks prescribed by the
TRAI from time to time.

Bharti Posts 51% Rise in Net Profit

Bharti Airtel has recorded 51% growth in net profit, and 46% in revenues
during the financial year 2005-06, over the previous fiscal. FY06 revenue was Rs
11,663 crore, while the net profit was Rs 2,258 crore. For the fourth quarter,
the firm's net profit went up 49% at Rs 682 crore and revenues were up 47% at
Rs 3,411 crore. As of March 31, 2006, Bharti had 20.9 mn customers (19.5 mn
cellular and 1.35 mn landline and broadband). Bharti's cellular coverage
extends across the country in 3,778 towns and 80,687 villages, with 20,970 cell
sites that have doubled in the past year. Bharti spent around $1.5 bn on
expanding networks during FY06.

Hutch Essar Seeks DoT Nod

Hutch Essar is seeking approval from the Department of Telecom for
its planned merger with BPL Mobile Communications, which operates GSM services.
As per merger norms, the combined entity should not have a market share of more
than 67% in the circle. The combined market share of the two companies is well
below this mark. Once BPL is merged with Hutch Essar, the Hutch brand will
replace BPL in Mumbai.

MTNL Cuts Mumbai-Delhi Tariff

MTNL has cut rates on its landline calls between Delhi and Mumbai by 80%.
MTNL is the largest landline player in the two cities with a total of 3.8
million subscribers. Effective June 1, 2006 a call between Delhi and Mumbai on
the MTNL network will be treated as local and will be charged at Rs 1.20 per
three minutes, against Rs 5.70 per three minutes charged now. Other operators
may follow MTNL's move to remain competitive in the lucrative Delhi-Mumbai
market. Private operators charge up to Rs 2.65 a minute. Different operators
offer a flat STD rate of Re 1 under the OneIndia plan, but at significantly
higher rentals. MTNL has obtained an NLD licence from the DoT, which will reduce
its carriage costs from Rs 12 crore to Rs 2.5 crore from June 1, 2006.

TRAI Revises Data Submission Date

TRAI has directed all telecom operators to submit monthly report of their
ILD traffic minutes by the 25th of the following month. In order to curb the
grey market in international calls, TRAI had directed all the operators to
report international traffic minutes every month. BSNL, in response to TRAI's
directives, had stated that it was not possible for it to generate the required
reports and submit the same in the prescribed time frame, due to legacy of its
network.

C-DOT May Tie-up with Bell

C-DOT and Bell Labs, the research and development arm of Lucent
Technologies may join hands to work in the field of new generation
communications technologies.

DoT's Rs 1000 cr for Spectrum

The government has announced a Rs 1000 crore project to convert
wireless operations of defense services on optical fiber cable, a move to
release 45 MHz of spectrum. DoT will invest Rs 1000 crore for this project.

Airtel to Offer Group-calling Facility

Airtel has announced the deployment of Kodiak Networks Real-Time Exchange (RTX)
System to offer a suite of advanced voice services called Airtel Group Call (AGC)
to its customers. Airtel will commercially offer a suite of AGC voice
applications to its nationwide base of GSM customers on a SIM card. The services
include Voice Bridge, mobile-originated conference calls with up to a total of
10 wireless and landline participants.

Airtel, Disney Join Hands

Airtel has joined hands with Disney to launch India's first 'Disney
Mobile Theatre'. Airtel customers can now have access to six Disney animated
series in the form of 30-second shots, exclusively made for mobile devices
featuring Disney characters. In addition, Airtel customers will have access to
Disney characters in the form they want-images, animations, videos, ring
tones, and games. This content can be downloaded from Airtel Live! Music and
ringtones from Airtel's Hello Tunes.

Bharti to Offer Services in Jersey

Jersey Telenet, a subsidiary of Bharti Global, will offer its
services in Jersey, the southern most island of the British Isles. The firm will
invest over £20 mn in setting up a state-of-the-art network that is expected to
be operational from October. The network and IT systems will be set up in
partnership with Nokia and IBM. While Nokia will set up the telecom
infrastructure, IBM will be the IT solutions provider. Expertise will be drawn
from group firm, Bharti Airtel.

MTNL Signs MoU With Novell

Novell has announced that it has signed an MoU with MTNL to impart
training on Novell's Linux solutions. As per the MoU, MTNL's Center for
Excellence in Telecom Technology and Management (CETTM) will be Novell's
authorized training partner and will offer Novell certified Linux courses to
aspiring professionals. The initiative is aimed at providing an impetus to match
the growing need for skilled Linux professionals in the country. The course
offerings will range from basic Linux administration skills such as system
administration and networking to specific areas of expertise, such as kernel
internals, clustering, and security.

Primus Telecom's 'Mobile Nation'

Primus Telecom has launched 'Mobile Nation', a mobile phone
download service providing ring tones, graphics, wallpapers, and games for
mobile users. There are no on-going subscriptions, contracts or regular charges.
Individual downloads of ringtones, graphics, and games are priced five dollars
each.

Govt's Special Package for NE

Government has approved a proposal for implementation of the second
phase of special package for improvement of Doordarshan and All India Radio
services in the North Eastern region and island territories at a cost of Rs 400
crore. The implementation of the package would lead to increased coverage of DD
and AIR in the North East region and Island territories, and also improve the
quality of programmes.

VSNL Buys Out 7 Star's Internet Biz

VSNL has bought 7 Star Cable, an Internet service provider in Mumbai. The
deal gathers significance as it allows VSNL last mile access and offers an
expansion route through cable operators. Telecom operators such as Reliance
Infocomm and Bharti have been eyeing the retail broadband market, but been
unable to see rapid growth. The earlier acquisitions of VSNL included DishnetDSL
for Rs 2.7 bn and Tata Power broadband for Rs 2.3 bn, which gave it broadband
subscribers in the retail as well as the SME segments.

CAG Pulls up BSNL

The Comptroller and Auditor General of India (CAG) has pulled up BSNL
for under-utilization of its wireless-in-local loop (WLL) telephone system
mainly on account of poor planning, procurement, network coverage, and bad QoS.
While the company created a capacity of 26.8 lakh lines for its fixed and
limited mobile WLL phone 'Tarang', only 16.2 lakh lines were provided as of
March 2006 with capacity utilisation at 60.5% .

Zee to Spend Rs 7.5 bn on WWIL

Subhash Chandra, CEO of Zee, has made investment plans for the two de-merged
entities of Zee Telefilms (ZTL). Wire and Wireless (India) and Dish TV, engaged
in the cable TV and direct-to-home (DTH) businesses respectively, will together
be pumping in Rs 7.5 bn to fund their expansion plans.

DoT Says No to Outside Audit

In the spectrum war, DoT is following demand by Tatas to keep the
allotment policy in abeyance pending verification of subscribers. The department
appears to be disinclined for a third party auditing. Officials said the market
had matured and government has to have some faith in the service providers
although the DoT has the right to verify or check if gross or visible
discrepancies come to notice.

Telcos Bet Big on Broadband

Reliance Communication Ventures (RCoVL) and Bharti Airtel, it's not
only the wireless segment that's growing. Broadband and long-distance
businesses are also contributing to the growth. In Bharti's case, combined
long distance and broadband revenues grew by 14%. RCoVL's revenues from these
two segments together, grew by 6% on a q-o-q basis, against a 7% growth in its
wireless revenues. The increase in the broadband and long distance revenues is
being contributed by higher minutes of use in the long distance segment and
larger average revenue per line in the case of broadband.

Egypt in Orascom's Hutch Bid

The Egypt Government has gone on record and has shown interest in the
Hutch-Orascom bid.If necessary, it will give India "the assurances about
Orascom's impeccable global business credentials" to defuse any concerns
relating to India's national security. Apart from provoking serious
differences between Hutch-Essar's two biggest shareholders-Hutchison Telecom
and Essar Group-in recent months, Orascom's indirect shareholding presence
in Hutch Essar has reportedly induced national security concerns in sections of
the Indian Government, especially since Orascom Telecom runs mobile services in
Pakistan and Bangladesh.

'Data to Drive Telecom ARPU'

Data would be the key driving force of ARPU for the Indian telecom industry.
Sam Pitroda, chairman of the National Knowledge Commission, stressed this point
while felicitating the winners of second Mobile Developer Awards organized by
Reliance Developer Program (RDP). He said, "With the ongoing telecom
revolution in India and the addition of around 4-5 mn additional phones per
month, voice may be free in future."

Mobile India Outruns US

With India adding some 5 mn mobile phone users per month to its
already swollen base, the pundits are saying it will overtake both the US and
Russia in the number of 24x7-connected people. However, it will still not make
India the world's No 1 mobile connected country, it will rank second behind
China (409 mn Chinamen own a mobile phone, as of April, 2006). China adds 5.4 mn
mobile phone users each month. In a study by the NPD Group, the data revealed
that a mobile sale to consumers in the US was pegged at 35 mn units in the first
quarter of 2006. This was a 11% jump over 2005. The total sales were worth $2.3
bn. Of the US market, Motorala has a 29% share, while Nokia is at a lowly 18%.

Tata Indicom's New Scheme

'Don't stop Mobile' is a new scheme unveiled by Tata Indicom
across 20 circles that allows customers to make free outgoing calls for a period
of 2 years to any Tata Indicom Mobile or Tata Indicom fixed phone. It allows a
maximum outgoing talktime of 3,600 minutes (60 hours) to another Tata Indicom
phone.Indicom earns average rate per user (ARPUs) of Rs 200 each from the free
incoming scheme users. "We are very proud. We have started to gain some
scale," says Green. "It is the fastest growing pre-paid product in
India with the unique 100% offering," he claims.

Bharti Keen on Gabon

Bharti Enterprises is in talks with the Government of Gabon to offer telecom
services in the African country, including the possibility of picking up stake
in the state-run company Gabon Telecom. The move is part of Bharti's plans to
launch operations outside of India. In this regard, Sunil Mittal, chairman and
MD, Bharti Group held talks with senior officials from Gabon including Paul
Biyoghe, Minister of Commerce.

IMImobile Launches First 'Talking SMS'

IMImobile has developed 'Talking SMS', which enables any mobile
user to send voice based SMS instead of text. This comes close on the heels of
hugely successful VideoToneT that was developed for Nokia. The service is
language agnostic and allows users to send any message to any user in his own
local language with their emotions, which hitherto never got captured in written
SMSs. Telecom Industry sources quote that more than 50% of the Indian mobile
subscriber base have never sent an SMS as English language penetration is low.
'Talking SMS' will come in handy for users who are not acquainted with using
written English.