India’s telecom sector is braced for a shake-up, with profits expected to come under pressure, while some operators could be completely squeezed out of the market as companies prepare to battle for survival, according to analysts.
This challenging outlook for the world’s second largest telecom market is largely driven by the impending entry of Reliance Jio, a new operator due to be launched in the next few months by Reliance Industries, controlled by Mukesh Ambani, India’s richest man. Reliance Jio has invested 1 trillion rupees (Dh55 billion) into building its network and is gearing up to offer fast and cheap data services to grab market share.
Among Reliance Jio’s rivals will be Reliance Communications – which Mukesh was forced to hand over to his brother, Anil, in 2005 amid a family feud.
Existing operators have expressed concerns over the entry of the new company. Sunil Mittal, the chairman of Bharti Enterprises, which owns one of India’s biggest telecom operators, Bharti Airtel, has said that its launch will certainly result in lower tariffs.
"Should we be concerned about Jio? I think we should be about all kinds of competition, be it Vodafone, Idea, or Jio, and yes, when Jio is coming in, one has to take it up very seriously," Mr Mittal told the Economic Times, an Indian business newspaper. "Let me say we are prepared to face the onslaught. We have a large pool of airwaves across bands. We have a very extensive network now."
As it aims to fend off competition, Bharti Airtel this month unveiled plans to invest 600bn rupees in upgrading its network over the next three years. The huge investment strategy, known as “Project Leap”, will see Bharti Airtel upgrading its infrastructure and expanding its data network in rural India.
“We only hope that Reliance, which is very prudent and seeks returns for its shareholders and its investments, will be prudent but we will be too optimistic if we say they won’t have some price pressures,” Mr Mittal said. “Ultimately, they are entering the market and will do something for acquiring market share. So, I hope it is within reason.”
Vodafone India last month announced that it would inject an extra 13bn rupees to upgrade its network.
There is a great deal at stake. The number of mobile phone connections in India is set to rise to 880 million this year, up from 837 million connections last year, according to Gartner. Spend on mobile services, meanwhile, will increase by 4 per cent to reach $21.4bn this year, it forecasts.
Debasis Chatterji, the chief executive of Netxcell, a telecommunications application provider based in Hyderabad, says that next year the “industry will witness some consolidation. Mergers and acquisitions will happen”.
Expanding competition in the telecom market prompted ratings agency Fitch Ratings to last month issue a negative sector outlook.
“Five to six operators will emerge from the industry shake-out,” Fitch says. “The top four: Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications – are likely to raise revenue market share to 80 per cent in 2016 (compared with 77 per cent this year) as weaker ones exit. Weaker unprofitable telcos including Videocon, Aircel and Tata could exit the industry as they make operating losses and lack key spectrum assets and financial flexibility to invest in data networks. Such telcos will seek M&A among themselves or trade their spectrum to larger telcos.”
One beneficiary of the increased competition will be the consumer, with prices set to fall.
“We expect data tariffs to fall by at least 15 per cent to 20 per cent as incumbents compete on price with Jio, which is likely to offer cheaper data tariffs to build market share,” Fitch says.
It estimates that industry revenues will grow by 2 to 3 per cent next year compared to 9 per cent. This will be “driven solely by data services as voice matures and subscriber growth slows”.
The revenue contribution of data will rise to 25 to 27 per cent compared to 18 to 20 per cent last year, it adds. Fitch predicts that data traffic will double because of the growing number of cheaper smartphones available in India, while lower data tariffs will also drive greater use of data services in the country.
Naval Seth, a research analyst at Emkay Global Financial Services, based in Mumbai, explains that the fact that operators are being forced to increase their capital expenditure because of Reliance Jio is bad news for the attractiveness of the sector to investors.
“We maintain our cautious stance on the sector given the structural issues that are expected to pan out in near-medium term,” he says.
A key focus for Reliance Jio is to offer an extensive 4G network. Bharti Airtel this year rolled out 4G services. Vodafone India is scheduled to start its first 4G services in Kochi on Monday as it readies itself for its new rival. Vodafone aims to launch 4G in a few other major cities including Mumbai and New Delhi next year. Reliance Retail, a sister company of Reliance Jio, is producing a range of 4G smartphones to help spur demand.
“Most of the Indian telecom operators are focusing on data and betting on the data revolution happening in the country,” says Mr Chatterji. “Voice revenue is not growing at a high pace but still contributes the major share for most operations. 4G licence auction and sharing of spectrum among the operators for a pan India presence is getting stabilised. However, SMS services have suffered a loss due to the rise in apps.”
This all comes as Indian telcos have come under fire because of the high frequency of ‘call dropping’ in the country. The industry in India has grown at a rapid pace but many believe that the quality of the services is lacking.
Mr Chatterji says: “The future is data, no doubt - but voice business is the core business of any telco. It cannot be neglected. Call drop has become a major concern.”
India’s communication minister Ravi Shankar Prasad last week said that the government was well aware that problems were plaguing the sector and he criticised telecom companies for their “very bad” services. He said that the government was striving to address the problems and that telcos had been ordered to improve, while steps would be taken if they did not comply.
“I think Reliance Jio is a huge variable factor in this space,” says Pankaj Sharma, the head of equities at Equirus Securities. “I also think that the company would be more prepared to handle the customer service and could offer attractive offerings, which is a combination of price as well as quality.”
There are other challenges that operators face, he adds.
“The capex requirements are still huge and as technology continues to evolve, this would not get eliminated altogether. Apart from these issues, we think that there are company specific issues like high debt levels and not so successful geographical expansion outside India.”
Call drops set to cost operators
India’s telecom regulator intends to move ahead with a plan to force operators to pay customers one rupee in compensation for each telephone call that gets disconnected, in an effort to solve the nation’s widespread problem of “calls drops”.
The penalty, being enforced by the Telecom Regulatory Authority of India (Trai), is set to come into effect from January 1.
Call drops are a huge issue for mobile phone users in India, with it being commonplace for calls to be cut off mid-conversation because of connectivity issues.
Customers will receive compensation for up to three dropped calls a day under the scheme.
But this could end up costing operators US$8 billion a year, according to some estimates - although the regulator has pegged the total cost at about $120 million annually - Bloomberg News reports.
“There are many quality of service issues,” RS Sharma, the chairman of Trai, told the newswire in an interview earlier this month.
But objections have been raised to the scheme by operators and industry bodies.
“Compensation to the consumers for call drops is not the correct approach and will not resolve the underlying problems which are in the main, beyond the immediate control of the operators,” says Rajan Mathews, the director general of the Cellular Operators Association of India (Coai), an industry trade body, based in New Delhi. “Until and unless adequate infrastructure is allowed to develop, the issue cannot be resolved. Fixing the problem of adequate network infrastructure, mainly cell towers, adequate and affordable spectrum, educating citizens on EMF (electromotive force) safety norms to address their fears and opposition to cell towers, removing local government delays and opposition to cell towers, are the effective ways to address the problem.”
Mr Mathews points out that there are a number of problems and implementation issues that the penalty system might face, including how to distinguish calls which have been disconnected because of network issues and those that are cut off because a user is in a lift, for example, and is perhaps deliberately trying to make the call drop.
Coai estimates that about 100,000 mobile towers will be needed over the next two yearsacross the country “to support a burgeoning subscriber base and cellular operators are working to bolster existing networks to be able to meet the demand”.
It says that to facilitate this “operators will need the continuing assistance of the government and the citizens, so as to facilitate seamless connectivity”.
business@thenational.ae
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
More from Neighbourhood Watch
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
Without Remorse
Directed by: Stefano Sollima
Starring: Michael B Jordan
4/5
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%3Cp%3E%0D%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E6-cylinder%2C%204.8-litre%20%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E5-speed%20automatic%20and%20manual%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E280%20brake%20horsepower%20%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E451Nm%20%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3Efrom%20Dh153%2C00%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
COMPANY%20PROFILE
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
PROFILE OF STARZPLAY
Date started: 2014
Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
Sector: Entertainment/Streaming Video On Demand
Number of employees: 125
Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Killing of Qassem Suleimani
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
ICC Women's T20 World Cup Asia Qualifier 2025, Thailand
UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final
The%20Genius%20of%20Their%20Age
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
The five pillars of Islam
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
The past Palme d'Or winners
2018 Shoplifters, Hirokazu Kore-eda
2017 The Square, Ruben Ostlund
2016 I, Daniel Blake, Ken Loach
2015 Dheepan, Jacques Audiard
2014 Winter Sleep (Kış Uykusu), Nuri Bilge Ceylan
2013 Blue is the Warmest Colour (La Vie d'Adèle: Chapitres 1 et 2), Abdellatif Kechiche, Adele Exarchopoulos and Lea Seydoux
2012 Amour, Michael Haneke
2011 The Tree of Life, Terrence Malick
2010 Uncle Boonmee Who Can Recall His Past Lives (Lung Bunmi Raluek Chat), Apichatpong Weerasethakul
2009 The White Ribbon (Eine deutsche Kindergeschichte), Michael Haneke
2008 The Class (Entre les murs), Laurent Cantet
MISSION: IMPOSSIBLE – FINAL RECKONING
Director: Christopher McQuarrie
Starring: Tom Cruise, Hayley Atwell, Simon Pegg
Rating: 4/5
KILLING OF QASSEM SULEIMANI
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Killing of Qassem Suleimani
The five pillars of Islam
Mohammed bin Zayed Majlis
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Formula%204%20Italian%20Championship%202023%20calendar
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More coverage from the Future Forum
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Mohammed bin Zayed Majlis
THE BIO
Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13
Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier
Favourite place to travel to: Any walkable city. I also love nature and wildlife
What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents.
Favorite place to go in the UAE: A quiet beach.
Islamic%20Architecture%3A%20A%20World%20History
%3Cp%3E%3Cstrong%3EAuthor%3A%3C%2Fstrong%3E%20Eric%20Broug%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Thames%20%26amp%3B%20Hudson%3Cbr%3E%3Cstrong%3EPages%3A%3C%2Fstrong%3E%20336%3Cbr%3E%3Cstrong%3EAvailable%3A%3C%2Fstrong%3E%20September%3C%2Fp%3E%0A
UK's plans to cut net migration
Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.
Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.
But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.
Language requirements will be increased for all immigration routes to ensure a higher level of English.
Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.
The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.
Killing of Qassem Suleimani
The specs
Engine: 5.0-litre supercharged V8
Transmission: Eight-speed auto
Power: 575bhp
Torque: 700Nm
Price: Dh554,000
On sale: now
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
RACE CARD
4pm Al Bastakiya – Listed (TB) $150,000 (Dirt) 1,900m
4.35pm Dubai City Of Gold – Group 2 (TB) $228,000 (Turf) 2,410m
5.10pm Mahab Al Shimaal – Group 3 (TB) $228,000 (D) 1,200m
5.45pm Burj Nahaar – Group 3 (TB) $228,000 (D) 1,600m
6.20pm Jebel Hatta – Group 1 (TB) $260,000 (T) 1,800m
6.55pm Al Maktoum Challenge Round-1 – Group 1 (TB) $390,000 (D) 2,000m
7.30pm Nad Al Sheba – Group 3 (TB) $228,000 (T) 1,200m
25%20Days%20to%20Aden
%3Cp%3EAuthor%3A%20Michael%20Knights%3C%2Fp%3E%0A%3Cp%3EPages%3A%20256%3C%2Fp%3E%0A%3Cp%3EAvailable%3A%20January%2026%3C%2Fp%3E%0A
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Takestep%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20March%202018%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Mohamed%20Khashaba%2C%20Mohamed%20Abdallah%2C%20Mohamed%20Adel%20Wafiq%20and%20Ayman%20Taha%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Cairo%2C%20Egypt%0D%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20health%20technology%0D%3Cbr%3E%3Cstrong%3EEmployees%3A%3C%2Fstrong%3E%20%2011%20full%20time%20and%2022%20part%20time%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20pre-Series%20A%3C%2Fp%3E%0A
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5