Companies & Sectors
The Year That Was: Technologies galore, but affordability remains a question

It was a big year for phone freaks with fast-improving handsets and newer services even allowing for mobile payments. But content and price remained a major obstacle for television

The year 2010 dished out quite a few treats for technophiles. It was a leapfrog year particularly for mobile phone subscribers who got regular upgraded hardware (improved mobile handsets) as well as pipeline (bandwidth). We finally saw the awesome performance of third generation (3G) technology as well as the emergence of Google’s Android operating system (OS) as the main competitor to Apple’s iPhone OS, and the internet search giant’s entry in the mobile handset market with Nexus One. On the home pitch, LCD televisions gained popularity, although the euphoria over 3D LCD or LED TVs may be dying due to lack of corresponding content.

Mobile moves

Numerous handsets were launched with newer and more features and the smartphone emerged as the standard device among youth and professionals. Three big companies launched new OS. While Microsoft launched Windows Phone 7, Samsung came out with its Bada OS. Nokia decided to stick to its old and trusted partner and launched Symbian 3. Although Google had launched its Android OS in 2009, it took a new step with the launch of the Nexus One handset in January 2010.

On the OS front, while there are very few handsets that run on Win7, the acceptance of Android by mobile manufacturers saw the launch of many more handsets based on the OS. Today, the Android is neck and neck with Apple’s iPhone OS4 in the smartphone segment. For some reason, there’s a reluctance by Apple to launch newer handsets in India and this would prove be an advantage for Android.

During 2010, Indian mobile brands started gaining more acceptance among customers. According to a report by International Data Corporation, Micromax, with a 6% market share is now the third largest GSM mobile phone vendor in India after Nokia and Samsung. The growing popularity and acceptance of Indian mobile brands may be the death knell for so-called Chinese mobile phone models, which are finding lesser buyers every passing day.

MNP, 3G is here

Even after fighting a tough war, not a single mobile service provider could grab the pan-India license for the 3G services. The pan-India auction amount touched Rs16,750 crore ($3.7 billion), up 379% over the base price of Rs3,500 crore.

Bharti Airtel, the country’s largest telecom player managed to win 3G licenses in 13 out of the 22 circles. Reliance Communication (RCom), the second largest player, also successfully bid for 13 out of the 22 circles, but with a predominantly ‘B’ and ‘C’ circle footprint, in addition to Delhi, Mumbai and Kolkata.

As the year ends, there are four players offering 3G services to subscribers—Mahanagar Telephone Nigam (MTNL), Bharat Sanchar Nigam (BSNL), RCom and Tata DoCoMo. But, two weeks ago, the Department of Telecom (DoT) asked the two private operators to shut their 3G services as security agencies were not able to snoop into data flowing through the networks. Both RCom and Tata DoCoMo immediately stopped video-calling services on their 3G network. Now, these concerns raised by security agencies could prove to be a deterrent for 3G services.

As Moneylife had predicted, there was a delay in launching mobile number portability (MNP). Nevertheless, it was finally launched in Haryana earlier this month and it will be rolled out across the country over the next month or two. (Read, ‘Mobile number portability delayed due to the 3G auction?’ and ‘Mobile Number Portability: So near, yet too far’ )

Mukesh Ambani, who had to leave the telecom business for his younger brother, has made a comeback into the sector in style. Infotel Broadband Services, which emerged as the only company to win a pan-India broadband license, was bought by Mr Ambani for Rs4,800 crore. Mukesh Ambani’s re-entry into telecom is significant in many ways and has the potential to change the broadband game altogether.

According to Jon S von Tetzchner, co-founder, Opera Software, only 28.7% of the world’s population uses the Internet. “Though the maximum internet usage is clocked in Asia, internet penetration in comparison to the rest of the world is a low 21.5%. This shows that about 80% of the population falls in the growth potential category,” he said. Next year will be important for the 3G as well as broadband space.

Mobile commerce

Last month, the National Payments Corporation of India (NPCI) launched its much-awaited interbank mobile payment service (IMPS), which has the potential to change the payments scenario in the country. According to bankers, this system could revolutionise the retail payments process and even overtake the number of payment transactions carried out through cards and the internet.

IMPS is restricted to interbank transactions, but can be used by anyone and from anywhere to make payments. One could pay the grocery bill to the shop owner through the mobile phone, provided both parties are registered IMPS users with their respective banks. Similarly, one could pay the fare to a taxi driver directly through IMPS.

Dewang Neralla, director, atom Technologies and co-founder, Financial Technologies, said, “Mobile phone transactions are ubiquitous, have multi-purpose functionality with low adoption hurdles, are highly interactive and provide security as well.”

The penetration of electronic transactions remains strikingly low in India compared to the US and South Korea. Today, only 3% of the transactions in the country are done electronically, whereas in the US electronic transactions account for almost 52% of the total traffic.

“Even if we can achieve 20%, it will mean a huge jump. The sheer size of our economy and consumption power is very large. The moment we get organised retail onto the electronic payments bandwagon, transaction volumes will be phenomenal,” Mr Neralla said.

The coming year will definitely see the emergence of mobile commerce and payments as an option to card-based transactions. Who knows, over the next few years it may well replace the complete plastic card payment system, altogether.

Emergence of Tab

This year also saw emergence of some functional and good looking tablets like iPad from Apple and Samsung Tab. These tabs are nothing but the combination of computing device like netbook and mobile handset. While its screen size (about 7-inches) is larger than mobile, it is often smaller than netbook (about 10-inches), in order to make it handy. Here again, the apathy of Apple is clear as such its iPads are not easily available in India at competitive rates. However, Samsung is taking efforts to grab the opportunity and making sure that its Tab at least get enough eyeballs though media campaigns. However, I think, there should be more competition in tabs in order to give some real benefit to consumers.

Consumer electronics

During the year, there was more hype built around 3D technology for television and high-definition (HD) transmission for direct-to-home (DTH) platforms. As we tune into the New Year, it’s clear that both 3D and HD have failed to live up to expectations, mainly due to a lack of content. According to media reports, Sony Corp had said that the new 3D TV sales failed to live up to industry expectations.

The higher price may have also played a part in the lower sales of 3D TVs. Today, one can buy a typical 40-inch LCD TV for about Rs40,000, while a 3D TV of similar dimensions would make the wallet lighter by more than Rs1 lakh. In addition, it requires a special pair of glasses to enjoy the 3D format. Manufacturers provide one or two pairs bundled with the TV set, but every additional pair costs a steep Rs10,000.

But there is encouraging news on this front. Next month, Toshiba will show its no-glasses 3D TV for the first time outside Japan, at the International Consumer Electronics Show at Las Vegas. While the high cost and lack of appropriate content was a dampener in 3D TV sales, content was also a headache for DTH service providers while transmitting channels in HD. Very few of the more than 450 channels operating in India telecast in the HD mode, and those that do, charge more fees. Nevertheless, as and when more channels opt for HD delivery, tariffs could come down over the next few years.

We may have not included all the new bits and pieces, but Moneylife will continue to give you a discerning view of the technology trends as they play out in 2011.


Realty sector hit by lack of interest in commercial spaces: CREDAI

Chennai: Residential projects have attracted huge investments across the country in recent years, but many commercial plots in major cities are lying vacant due to a dearth of buyer interest, reports PTI quoting Construction Real Estate Developers of India (CREDAI).

“While 12 million square feet is lying idle in Chennai, it will be more across the country. Many areas in Hyderabad, Bangalore and Gurgaon are lying vacant in commercial spaces,” Construction Real Estate Developers of India (CREDAI) national vice-president Prakash Challa told PTI.

Noting that the real estate industry saw a slowdown after the sub-prime crisis in the US, he charged the Centre with not taking any steps to revive the industry.

“If they had taken steps immediately after the crash of the US market, the sector would not have faced this much of a problem... All developers and agencies would have been cautious,” he said.

Asked whether there was any positive impact from the government's intervention after the global economic crisis erupted in 2008, he said, “There are no good developments still in the commercial space front. Only limited investments are coming up.”

“If the government extends the stimulus package, it will generate employment. But if they withdraw it, then there will be a serious problem. Today, many buildings are sitting idle and every builder has become cautious... They don't want to commit themselves (by investments in commercial spaces),” he said.

He said the situation is expected to improve over the next one or two years.

Mr Challa said Tier-II and III cities were the worst-hit, with no major developments in the commercial spaces sector.

Nevertheless, real estate developers are investing heavily on huge residential projects, Mr Challa said.

“Particularly in the Oragadam-belt (near Chennai), many builders are doing good business. It has become the favourite area for many developers as it has many commercial establishments nearby,” he said.

He said low income housing projects have been a “grand success”.

“I was told some builders have sold about 500-600 housing units in the low income category,” he said.

The success was not only due to the presence of logistics parks, but the fact that people have also started looking at buying properties in newer areas, he said.

The Oragadam and Sriperumbudur belt currently has various companies—including auto majors like Nissan Renault, Daimler India, Hyundai Motor India and consumer durable giant Samsung—that have set up shop.

“Basically this area is only for budget homes... not for the high-end,” he said.

On the lack of proper connectivity to Chennai and other destinations from these localities, he said infrastructure would gradually be put in place as people begin to move in.

Infrastructure development would take time, as many people working in far off areas commute today from the city, he said.

Currently, real estate developers like Arun Excello, TVH, Tata Infrastructure and MARG Properties have real estate projects coming up in these areas.


Wednesday’s Market Preview: Range-bound opening expected

The local market is likely to witness a range-bound opening today as the Asian markets are trading with marginal gains in early trade while Wall Street closed in the green, supported by energy stocks due to the cold weather prevailing in the north-eastern region of the country. The SGX Nifty was down 5.50 points at 6,010.50 compared to its previous close of 6,016 on Tuesday.

Volatility is expected to continue today ahead of the futures and options expiry on Thursday.

The market opened with minor gains yesterday on the back of mixed global cues. Choppy trade resulted in the key indices dipping in and out of the red ahead of the futures and options (F&O) expiry. The market touched the day’s low in noon trade, but volatility continued amid low volumes on limited participation of institutional investors as the calendar year comes to an end. The market closed flat. The Sensex ended at 20,025.42, down 3.51 points or 0.02%. The Nifty settled 2.10 points (0.04%) lower at 5,996.

Markets in the US closed mostly in the green on Tuesday, supported by gains in energy stocks as cold weather prevailed in the north-eastern region of the country. In economic news, the Conference Board’s confidence index unexpectedly fell to 52.5, lower than analysts’ predictions. The S&P/Case-Shiller index of property values fell 0.8% in October from the same month in 2009, the biggest year-over-year decline since December of last year, the group said today. Besides, employers added 951,000 workers to payrolls in the first 11 months of the year, according to figures from the Labor Department. Despite the gains, unemployment was at 9.8% last month after finishing 2009 at 10%.

The Dow surged 20.51 points (0.18%) at 11,575.54. The S&P 500 added 0.98 point (0.08%) at 1,258.52. The Nasdaq shed 4.39 points (0.16%) at 2,662.88.

Markets in Asia were trading with marginal gains in early trade this morning as weak economic data from the US raised concerns about the pace of the recovery in the world’s largest economy. The strengthening Japanese currency dampened sentiments of the country’s exporters.

The Shanghai Composite gained 0.04%, the Hang Seng advanced 0.46%, the Jakarta Composite rose 0.64%, the KLSE Composite was up 0.40%, the Nikkei 225 added 0.17%, the Straits Times and the Seoul Composite surged 0.34% each. On the other hand, the Taiwan Weighted lost 0.12% in early trade. The SGX Nifty was down 5.50 points at 6,010.50 compared to its previous close of 6,016 on Tuesday.

The Telecom Regulatory Authority of India (TRAI) on Tuesday released a consultation paper seeking views of stakeholders for promoting research and development (R&D) and manufacturing of telecom equipment in the country.

The consultation paper aims at discussing, debating and finalising measures for promotion of R&D and creation of intellectual property as well as manufacture of telecom equipment and electronic components in India, TRAI said in a statement.


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