Tuesday, 2 September 2014

Digital India may trigger Indian Telecom Sector and Effective Government Communication

In recent weeks, Indian regulators to ministries are coming out with ambitious plan to convert India into Digital India. The broader goal of government is to leverage Smartphone and Feature phone penetration to reach out to 75% Indian population in no time.

The government push also received applauds from Industry to opening new frontier for Telecom Sector. With growing struggle to generate additional revenue from mobile value added services, the new found love by government may trigger Telecom companies to invest in new infrastructure to make it compatible to capture untapped marketing spending generally done by government. It is also expected that new tech brownies is going to come out with many new idea to promote socio and eco related applications, product and services which in turn will help government to reach out to citizen with their services.

It’s a fantastic move by government to offer new lease of service at arm to Telecom sector and at the same time mitigate unwarranted spending on number of welfare services. It is being observed that government were spending multifold marketing $ to promote to single citizen.

I donot want to be negative about the threats attached through PESTLE and reverse eagle eye approach. Will come back soon with that assessment too. By Tushar Singhal

Bharti Airtel Wynk Launch – Upcoming pain for OTT music player

As per the trend, Bharti Airtel again initiated to change the market dynamics and this time around his initial focus turns on Music steaming. In recent years, it was predominantly visible that MVAS business going down post MVAS regulations and none of the innovative product was offering by MVAS players to help revive Mobile operator VAS business. Most of the operator centric VAS companies realigned their strategy on Mobile applications to sustain the dynamic industry change. The dwindling revenue from VAS segment and subsequent predominant situation of MVAS players to demand for level playing revenue share discussion offered enough indications that Mobile operators in India is losing edge and even their trusted partners turning their back.

The inclusion of fresh thoughts during one of the toughest transition of Bharti Airtel history, at last innovation received thumps up. The launched network and device agnostic music applications WYNX coupled with online and offline support is a master stroke from Bharti Airtel to reignite the MVAS revenue stream and subsequently higher data network utilization. Bharti Airtel went one step ahead of Vodafone and launched cross operator to demonstrate their latest theme of “Data enabled differentiated Network” which is airing across TVC and print media.

The attached payment mechanism and known efficient execution of Bharti Airtel in launching any product raises the viability of OTT players like Hungama, Saavn or Gaana as they rely on Advertisement revenue. It is pretty clear that these players will have tough time to promote their promote on Airtel network and subsequently on other network as competitor will be launching similar product in no time. It’s always been discussed about the content acquisition cost and subsequent ownership of the content but the move by Bharti Airtel made it pretty clear that it’s not far that Mobile Operator will be procuring content directly.

Now, it will be extremely interesting to see the follow up action by competitor and repositioning move by OTT players to mitigate direct threat to them

Thursday, 26 June 2014

Regulatory Move on Domain Centric Security – Perquisite of BYOD Adoption in India

The dynamic nature of mobility space in last few years created lots of buzz. At one end, the unimaginable surge of Apple promoted iOS mobile operating system (OS) based mobile device, Google promoted Android mobile operating centric devices whereas on the other end the demise of Motorola, Nokia device business sellout, Blackberry problems. The dynamic changes in the mobile operating system attached device ecosystem offered Enterprises new opportunity to opt for newer mobile OS powered packed with innovative feature set to access corporate data. The adoption of iOS and Android mobile OS based devices by Enterprise also brought another frontier to play with transition from Blackberry ecosystem as well as opportunities for innovative companies to come up with new products, services or Applications around new ecosystem.

India experienced unprecedented adoption of Android mobile operating system based device adoption and captured defunct Symbian operating system space which used to be dominating the marketplace. The open source Android mobile OS attracted many domestic device players into ring which propelled adoption by increasing efficient manufacturing and delivery mechanism. The rise in low cost Smartphone also attracted Android Application ecosystem players to offer both horizontal and vertical application targeted towards consumer and prosumer’s.

The iOS mobile OS attached Apple device also gained traction in India with adoption of subsidy route by most of the service provider to tap in high net worth Indian mobile users as post paid user to increase their ARPU. Blackberry BB10 mobile OS lost market share in India but still regarded as first priority choice it comes to Enterprise prosumer’s. Enterprise prosumer’s adoption levels are also changing and they want to have single device which fulfill both consumer and prosumer centric requirements.

Post Mobile Value Added Service regulation enforcement by Telecom Regulatory Authority of India (TRAI), mobile VAS providers are required to take mobile subscriber authorization before pushing any paid applications or product or service. The mechanism of double consent impacted mobile VAS ecosystem players and the monthly activation of mobile VAS went down in high double digit month over month. It is also expected that the legacy mobile VAS service would experience further erosion in user adoption and subsequently revenue fall.

The disruption in legacy mobile VAS service and focus in data centric service by mobile service providers attracted many new and existing mobile VAS developers. The low entry barrier for new Smartphone users, content portability by Enterprise for mobile ecosystem, plug and transfer mechanism of mobility ecosystem pushing Enterprise Mobility ecosystem in new horizon. Most of the Enterprises are contemplating to offer their internal and external clients mechanism to access product portfolio, tracking, product feedback and mechanism to capture new business opportunities. The major problem attached with low adoption of Enterprise mobility in India is nothing but content digitization, interoperability, portability, availability, reachability, scalability and security.

Recent regulatory as well as IT department initiative on Cyber security, Malware free Network equipment, Equipment hosting, Lawful intercept is going to have major positives for many Enterprise to adopt enterprises application on multiple OS supported devices. The malware free network equipment is going to filter unwarranted malware used to spoof user information and lead to hacking. The mobile security at device level is going to develop internal filtrations to keep the device free from any eavesdropping and in-turn remove the possibility of being used as mobility device Botnet by hacker to launch( denial of service) DoS, ( Distributed denial of service) DDoS and many other attacks on Enterprise servers. The lawful intercept regulation is going to offer Enterprise to have more confidence on Lawful agency to take care of any misuse of Enterprise assets for any unlawful activities. The stringent security regulatory guideline around BFSI sector possess new opportunity for BYOD adoption as mobile commerce, banking are on the rise. The enablement of security regulation to mitigate any adware, malware and phishing attack would open more BYOD user’s adoption of new horizontal and vertical application. It would also give higher level of confidence to Enterprise segment to connect their database with device hosted applications to enable user, employee and partner to retrieve, update centralized information management system real-time.

The servers including database hosting requirements as well as support regulation defined by government regulator where application providers are bound to keep mobile user information within Indian Territory. The implementation of above mentioned compliance will enable Service Providers to have higher visibility on data protection, transit, interoperability, portability; SLA which is going ease out stringent process to get BYOD registered with Enterprise owned IT infrastructure. Blackberry initiative to support cross mobile OS applications would act as change catalyst for higher adoption of Enterprise mobility. One can only hope that Indian BYOD adoption is going to witness exponential growth post adoption of above mentioned regulatory enforcement. It is going to hurt ecosystem players financially to comply with regulatory guideline but it also carries multiple cascading positives.

Indian Mobile Users are struggling to protect privacy from Unsolicited Commercial Communications by illegal Mobile Marketing Companies

In recent years, Indian mobility subscribers are getting lots of support from regulators. Telecom Regulatory Authority of India (TRAI) came out with multiple regulatory guidelines such as Mobile Number Portability (MNP), Mobile Value Added Service (MVAS) amendments, National Consumer Preference Registry (NCPR), Unsolicited Commercial Communications (UCC), and Roaming to enhance mobile user Quality of Service experience.

Continuous attempt by TRAI met strong resistance from service providers’ community as said regulations were considered by them as direct interference into their strategic and tactical business directions. TRAI managed to enforce mobile user friendly regulation and in-turn service providers invested millions of Dollars in the form of Capex as well as Opex without any direct revenue generation opportunity.

The implemented regulations intentions were considered by many analysts as milestone step by regulators to protect mobility users. Post Unsolicitated commercial communication (UCC) regulation, mobile user can initiate complaint against Telemarketing violating mobile subscriber’s privacy. If mobile subscribers registered themselves with National Consumer Preference Register (NCPR) by calling or sending request to 1909, then mobile subscribers would be entitled to escalate to regulatory bodies in case of their privacy violations. Mobile subscribers must remember that complaint must be done within 3 days of privacy violations. Mobile subscribers must take service request ticket number in order to make sure that their complaint or NCPR registration request are captured with service provider system. For NCPR registration activation implementation timeline is 7 working days whereas complaint resolution against unwarranted SMS or calls takes 7 days. Service providers verify complaint against mobile subscriber choice of NCPR. In case of the violation illegal Telemarketers receive notice as well as revocation of their telemarketer license. In case of complaint against Telemarketer using 10 digit mobile number instead of number starting with 140, regulatory impose heavy penalty and the owner of mobile number won’t be able take new number for two years.

In reality the enforced regulation somehow failed to impact the illegal mechanism to obtain mobility user information and use that information for mobile marketing activities. Generally, illegal Telemarketers manages to receive mobile user database from many sources where mobile users visits and register as web user and start executing mobile marketing call without any fear of regulation. Recently, TRAI even sent stern warning to BFSI sector to use defined practices to reach out to mobility user by adhering regulatory framework.

In practice many Enterprise are using bulk SMS mechanism through outsourced model to Telemarketing companies to reach out to mobility user in order to increase awareness about their existing or new products. Many illegal entities started feeling the pain of enforced regulation and even their business model were threatened given the high cost of mobile marketing including higher termination charges imposed by mobile service provider. In order to maintain their flagging profitability, many mobile marketing companies started taking contract from different sectors and started making unsolicited commercial call or sending SMS using 10 digit mobile numbers. By using existing user database which was developed over a period of time, Mobile marketing companies started procuring bulk voice as well as SMS plan based SIM and subsequently reduced their cost model drastically.

In order to further enhance their business, many illegal mobile marketing companies skipped standard process set by TRAI and also flooded service providers’ network with low revenue generating traffic. The new process inflicted major revenue leakage at service provider level and government also losing billions of Dollars. In order to safeguard business interest, Indian mobility user’s privacy was compromised and it is continuing unabated. None of the warnings or print media highlights being ignored by regulation offenders. The current penalty system defined by TRAI is too lenient for such companies as they are only interested in user data. On being slapped penalties, such companies close their shutter and open new companies. The loosely coupled regulation misses’ mechanism inclusion where service providers must be accountable to create awareness among Indian mobility users to enable them escalate the violation of their privacy with concerned regulatory bodies.

Indian mobility users placed in such an environment where most of them are not even aware that what rights they carry to protect their privacy. One can only conclude that “When Indian Mobility Users will get their due respect of their privacy”. Mobile subscribers must initiate escalation process to send across strong signal to illegal telemarketers and help mobile service providers as well as government to offer privacy, security to broader mobile subscriber base.

Indian Telecom Sector Non-Focus towards Consumer Awareness- May hurt business prospects

Indian Telecom sector is facing tough time for the last 3 years and is expected to experience reduced level of tough business environment. Telecom service providers blamed regulatory un-certainty for tough business environment and lack of product adoption by Mobile Subscribers but that is partially correct. Telecom Regulatory Authority of India (TRAI) and Department of Telecommunication (DoT) India must be appreciated for coming out with mobile subscriber centric and supportive regulation such as Mobile Number Portability (MNP), Mobile Value Added Services (MVAS) and its amendment, Roaming and many more.

Indian regulator were forced to take such a drastic move as mentioned above post multiple and continuous reporting from media and mobile subscribers of unwarranted activation of services, billing and lack of customer support. Regulators moves were focused to bring in competitiveness among Mobile Service Providers and thus to bring back focus on service or network Quality of Service in order to retain or acquire new mobile subscriber. The current Telecom environment and its competitiveness are closely knitted with services or products which are influenced by enforced regulatory to the maximum level.

It raises a simple query that

  • How many Mobile Subscribers are aware about their rights?
  • How many of Mobile Subscribers are aware about the process of activate or deactivate any VAS services?
  • How many Mobile Subscribers are aware about the process to escalate Unsolicitated commercial communications violating their privacy?
  • How many Mobile Subscribers are aware about process to escalate billing related concerns to their service providers as well as to regulators?

Based on survey (1500 Mobile Subscribers), the results were shocking as less than 1% were aware of process and generic answer were that we try to get it resolve through customer care and being charged for the same.

Somehow, Somewhere Mobile Service Providers are still missing the link of getting connected directly with Mobile users. Mobile Service Providers analyzed any product or service or application adoptions based on the said offerings activation factor but they must realize that it is difficult to analyze a particular product success when multiple products are hosted and mobile users are not aware.

In most of the new product launch, Mobile Service Providers are going for broadcast messaging to all active MVAS user base or print media such as newspapers or TV advertisement. Mobile Service Providers at an average spend around 5% of their total revenue in ad spend but at the same time they failed to create an awareness among mobile subscribers which focuses on mobile subscriber rights. Different Mobile Service Providers are offering multiple toll free numbers as well as message formats to retrieve automated information for mobile subscribers. Most of the Mobile subscribers don’t remember those toll free numbers or finds it hard to replicate the message format to retrieve information but are forced to rely on Customer Care.

Isn’t it true that, there is “NO” print media or TV communications from Mobile Service Providers creating awareness about mobile subscribers daily Telecom related problem such as product performance, activation /deactivation request, and billing issue. Mobile Service Providers argue that they are running customer care (CC) and also advertise their customer care number through multiple medium. It raises another query around consumer awareness through print media, campaign management and TV advertisement for above mentioned issue. How many times, any mobile subscribers have seen any print media awareness program regarding MVAS, MNP, Roaming and Billing?

The Subscriber feels helpless post continuous attempt to launch simple complaint. It triggered negative response from subscriber to subscribe or renew new mobile value added services such as music, ringtone, Infotainment post double consent enforcement under MVAS regulation amendment. Under double consent regime, service providers must take mobile subscriber consent before charging subscriber for any services or products. The recent drastic fall in MVAS activation and exponential rise in MVAS deactivation is nothing but early warning system. The telecom ecosystem players must realize that it’s not regulation but lack of offered value attached with offered value added service or lack of awareness about offered services or products.

Indian Mobile Service Providers donot have an alternative but to improve on consumer awareness program without fearing that awareness is going to create an environment where mobile subscribers will be deactivating already running services or product but instead of that it will attract many new mobile subscribers to adopt existing or new services.

The further delay in adopting proactive approach towards Mobile subscriber awareness program by Mobile Service Provider will have cascading impact on Telecom ecosystem players. They would be rest assured that in any circumstance their concerns would be resolved on the fly and that is going to trigger higher adoption of new or existing services or products.

In my point of view, the current state of Indian Telecom Sector offer highest level of opportunities for innovative proposition to bring back rapid eroding value added subscriber base.

Sunday, 8 June 2014

Microsoft owned Nokia devices most likely to lose 2nd Spot in Indian Device Market by Q3, 2014

The recently published IDC report on Indian Mobile Market flashes many hidden happenings which is going to unfold in next 6 months. It’s encouraging that Nokia came back to top 5 players of Smartphone with average monthly shipment of 350K cornering 6% of Smartphone market. Prior to Nokia Device acquisition by Microsoft, Microsoft played smart move by using Nokia as vehicle to launch Android Smartphone to recapture lost ground and they succeeded a bit. Given the released shipment and timing of their Android enabled Smartphone clearly indicate that the adoption was lukewarm.

In the meantime, their Feature Phone shipment went down drastically and that impacted their overall device market share which is currently at 13%. Interestingly, domestic player’s calibrated focus on both Smartphone and Feature Phone brought them in striking distance to claim 2nd position in Indian device market.

Post Microsoft acquisition, their consumer campaign turned to focus technological superiority and highlight prosumer benefits such as document editing and all. They missed to capture that those target segment is already captured by iPhone and Samsung high end devices.

With the growth reviving and Nokia Chennai plant taxation issue will limit them to continue procuring device from the plant and would be forced to procure it from their manufacturing plant or partners located in APAC region. It is going to squeeze their operating margin as Nokia device segment major strength in Feature phone market is very low end devices where domestic player are positioning their products aggressively. In my point of view, Microsoft owned Nokia device is going to lose their 2nd spot very soon and I feel that Q3, 2014 Mobile tracker will show that. I would not be surprised that if that happen in Q2 only.

I strongly believe that Microsoft should change their strategy for Indian Mobile sector if any way they are willing to recapture Nokia lost glory and brand.

Wednesday, 4 June 2014

Indian Smartphone Shipment May Cross 100 Million in 2014

Recently, CMR and IDC came out with very different Smartphone shipment figure for Q1,14. All newspapers published IDC report today and brought cheer for many domestic Smartphone players. Many raises concern about falling feature phone shipment and put the blame squarely on falling Smartphone price point. In my point of view, Smartphone growth in India is still to come and expecting blowout quarter in second half of year. The recent months observed that all leading device manufacturers started flooding feature filled 3G device under $150 and high specifications premium Smartphone in the range of $250. The drastic fall in price point is going to propel the adoption of data centric device and thanks to Mobile operators for their changed goal of data centric product launches. The report highlighted that overall device shipment fall of 10% Q-o-Q and in one way indicating that India is shifting towards Smartphone.

I would like to highlight that the economic environment in India worsened at the start of 2014 and thanks to high CPI, WPI and high unemployment rate coupled with political uncertainty. The downturn in economy impacted the rural India the most and reduced the buying capacity of user. I strongly believe that post certain policy clarity and subsequent investment by Corporate is going to help generate jobs and will have cascading impact on India gadget buyers.

In my point of view, IDC projection of 80.57 million by year end is on the conservative side. I believe that with the economic revival on anvil as all indicators are positive side coupled with low price point offering from all major Smartphone player is going to attract new as well as replacement market. Needless to say that India will definitely observe spike in feature phone shipment too. The expected bumper Q3, 14 holiday season will help India cross 100 million Smartphone shipment milestones. The trend is good news for budget and feature rich device manufacturer whereas will put margin pressure on global players.

Monday, 2 June 2014

How Education May Change Tagline In India – Everyone must contribute – Tushar Singhal

In India, more than 90% of children get admitted into primary schools but in due course 40% of them opt out due to multiple social thresholds and financial problems. The education system of India in turn supports only 54% children and enables them the ladder to achieve literacy but this 54% comprises of only 34% girls & 54% boys.

The dismal figure exists even after the government is spending 3% of its GDP as well as charging education cess from taxpayers to promote education among households which cannot afford to send their kids to schools. The figure itself raises multiple queries around Indian education system and it’s hierarchy of achieving right to education law passed by law of land. Some of the basic but non avoidable systems are not being taken care off and they are:

· Non availability of basic hygiene

· Very Low to Non Existent Infrastructure especially in rural India

· Lack of Qualified Instructors and Non-Availability of funds for Upgrading the Mechanism of Information Transfer To Students

· The Focus on students is minimal as the Average Teacher :: Student Ratio is around 1:40 and in some of the non developed states it goes as low as 1:80

· Lack of focus by school authorities to offer indirect intelligence enhancement tools to students to increase their IQ factor

· Lack of promotions by government authorities to procure latest hardware and software to make students well versed with the same.

In order to solve the above problems, Government promoted private sectors to open School and Colleges to increase the literacy at all levels but it backfired as private sectors always look to open such centers in locations which carry capital benefits and this forced me to believe that creating a few more schools or allowing hundreds of colleges and private universities to mushroom is not going to solve the crisis of education in India. Education system in India is failing because of more intrinsic reasons.

The core issue of Indian education system lies in teaching methodologies and missing link of knowledge transfer at every level as opposed to teaching skills. The difference between Indian education system compared with that of developed countries revolves around memorizing vs practical based learning wherein developed countries focus on the latter part.

In any scenario, if the government and also the citizen of India would like to have a better future then Indian education system must be overhauled from root with major focus on achieving end product instead of announcing programs and subsidy.

It’s always easy for everyone to raise questions but what exactly being citizens of India are we doing for our potential future as well as generation? Here are some of the recommendations I am proposing which I am following as well in order to contribute towards my homeland

· Funding one child’s education in one’s neighborhood such as the driver’s, maid’s or anyone’s kid. In India, there are 43 million taxpayers and if even 50% of the taxpayers opt for the same then more than 20 Mn children will get education and in future will turn out to be major contributors. The individual opting for such activities can be promoted with tax breaks.

· There are more than 7.5 Mn SMB/SME in India and they should come forward and fund 10 students’ education and in turn get tax breaks from government. It will simply put more than 70 plus million children back to school.

· It is being observed that many Indians are opting for gadget exchange program to buy new gadgets. It is advisable that one should also try to gift the same to children who need the same to increase awareness about new technologies.

· Its widely known that many NGOs are involved which get government funds to increase benefits of education in remote rural India but it must be tagged with commitment vs. delivery model.

· It is also advisable that Public school students must be allowed to access Private school labs and other infrastructure which inturn will convert Indian education system into Common schooling with no disparity among masses and classes.

· And many more suggestions can be given but I believe that if all of us start taking the first step then the major change will come automatically.

Although India has already shown its skills in ITIL sector but it must adopt the changing environment around the world in order to be competitive and for that all of us must focus towards giving the right approach to society. One can earn millions but satisfaction really comes when one does something which brings cheers on many faces. Just imagine if we can make one kid successful it is going to bring happiness and prosperity to the whole family. The initiative is not only going to improve the literacy but also bring out millions of Indians out of poverty. This is the time to make the move. So together let’s begin.

Monday, 26 May 2014

Indian Consumer Pains and Expectation from Application Providers– Tushar Singhal

India being one of the hot destinations for global and domestic mobility player to tap Indian mobility user’s from diverse categories. The active mobility user base of 740 million out of total registered mobile user base of 870 million created niche innovation segment focused towards mobile applications. The growing adoption of Smartphone which is more than 44 million in the last fiscal year communicated well about user adoption pattern on the device side. At the same time one must not ignore that feature phone market still command above 75% of the total device with most having data communication capabilities indicate that India users are still predominately cost and performance conscious. Most of the mobility users are moving from mobile operator hosted simple VAS services based on voice, SMS to data centric applications, product and services.

The Applications segment possess huge opportunity for niche and established players to gain maximum user base and inturn be differentiated. During the race of acquiring more user base, somewhere somehow; application developers completely ignored the need of mobility user. If one looks at the current model of applications offering, it is very clear that most of the brand especially e-commerce or entertainment or Games or classified or security or system tools specific applications are floating in each and every application centre. Indian mobility users which is using high end device with price tag of 15-25k should be considered as prosumer’s and may understand the mechanism of using such applications. During the process, application providers are retrieving all personal information of device user under the pretext of Terms and Condition and reuse it on multiple fronts. Indian device users are fond of such applications which are ONE TAP and fast. The expectations are of good quality video on demand or live TV but unfortunately, Indian mobility network is still under the evaluation end when it comes to data coverage. Even though Mobile operators are very aggressive in claiming that wireless data connectivity is good but they must come out of self imposed myth in order to identify the problem and solve it for the better mobile user retention.

As Indian mobility users are cost conscious and wants to have applications free but without imposed advertisements or flood of notification of additional applications. Indian applications market is ripe of applications which offer consumer information management which directly connect and solve consumer and prosumer daily life needs if Applications providers really needs to make loyal application user base. There are multiple applications offering device system tools which are nothing but the realigned application of Android feature set. There applications providers reaches out to end consumer in one or another medium and making consumer more confused. The solution providers of such applications must create tiered applications which seamless guide user or execute the functionalities offered to consumer. Lastly and most important the applications must be dynamic in populating information based on the inputs of consumer and prosumer choices.

Currently, mobility users are being used by Applications providers to create consumer adoption pattern module rather than fulfilling consumer needs and one should not be surprised in case of government watchdog jumps in to protect consumer privacy.

Sunday, 9 March 2014

Twitter Expected to Struggle in Coming Quarters – Currently Grossly Overvalued

Twitter IPO experienced huge success and created buzz of exponential growth potentials. The current environment of Internet centric companies garnering high valuations supported Twitter equity price and investors jumped into bandwagon to make profits in long terms.

Recent acquisition of WhatsApp by Facebook also fuelled analyst optimism. Post IPO most of the analyst cautiously optimistically supported valuation as Twitter projected aggressive approach to acquire more user and subsequently monetizing user assets.

Q4, 2013 results and projected 2014 offered few shocking facts around Twitter struggle to acquire more users. As the monthly active user base growth were in high single digit but showed good traction of Mobile monthly active user base of 184 Mn.

The growths in developed geographies are muted whereas Twitter is focusing on Emerging countries to gain more user base. One such example is their collaboration with highly successful TrueCaller to generate additional traffic as well as create an environment to lure additional user base on Twitter platform. The current monthly user base of around 241 Mn is generating around $0.3 Advertisement revenue per active user per month. Notably Twitter 90% of revenue comes from Advertisement. The EBITA margin for Q4 and 2013 came around 18% and 11% respectively. Interestingly most of the investors ignore stock based compensation which inturn will dilute total equity and its impact on Earnings per share.

On considering projected 2014 revenue range of $ 1.15 to $ 1.2 Bn seems distant. To achieve revenue and EBITA growth of around 85% and 100% YoY require Twitter to achieve 50% monthly active user base to command higher price point for advertisement.

The major hurdle for Twitter is to convert Emerging geographies into revenue generating userbase. It is very common in emerging countries that new user uses any service for few months and then move to another one. The micro blogging segment falls into premium service whereas messaging falls into mass segment. The recent move by Twitter is to monetize their user inventory to attract advertisers but it also irritated many loyal userbase. Given the current trend of user adoption, even if Twitter achieves 20% growth in monthly active user would require to generate minimum $1.11 per active user to achieve forecast for 2014. Does one feel that it’s achievable! The current market capitalization of around $30 Bn and EPS of (-$3.41) clearly indicate that Twitter is far from growth which is experienced by peers. The projected capex of 330-390 would put pressure on their cash flows and current cash position of $2.2 Bn is going to be used in future to expand their base. With bleak success probability, it is widely expected that any quarterly disappointment in Q1 and Q2 is going to bring down current share price downwards drastically as the indication were offered post Q4,2013 result.

In my point of view, Twitter will continue to struggle due to attached service nature which falls in select categories and further monetization effort may trigger exodus of loyal user base as the beauty of Twitter service was its cleaned service offering. On emerging market segment, they may face uphill task to grow due to regulatory and other aspects. Why not to invest in dividend yield based companies with strong market positioning such as Oracle, Cisco System and many others

Saturday, 8 March 2014

Why Optimism around Home Grown e-Retailer will Fade Soon.

The recent upsurge in e-Retailer segment business attracted analyst as well as retailer to claim explosive growth potentials in said segment. The CXO’s level of most of the Indian companies came out with growth projections which reminds me Telecom VAS forecast that happened in 2007. At least, Telecom VAS forecast came out as dump and many investors which include both PE and equity holders in publically traded companies suffered huge losses.

Last many weeks, most of the print media focusing on growth potential in Indian Online marketplace and potential higher adoption of Indian consumer space includes WEB and WAP user base. All cheered Flipkart achievement of $1 Bn revenue club in short period of time and ended up comparing with the likes of Amazon and predicted that Indian Online e-Business is going to achieve multibillion $ club in next few years.

The recent investment by PE’s in Indian Online e-Retailers cheered many and as a result many new e-retailers jumped in fray with focus on valuation. E- Retailers also projected that the exponential growth of Smartphone adoption in India is going to offer them additional opportunities to create business but seems they missed many factors on ground level.

Some of them are as follows

1. How many e-Retailers are profitable?

2. How many users are using their credit card?

3. What is the cost of user acquisition?

4. What is the conversion rates w.r.t consumer visits?

5. The cost involved in payment mechanism due to CoD?

6. What is the repeat user percentage?

7. How many Smartphone users are using devices to place order?

8. Did e-Retailers offer guarantee to maintain security and privacy concern around device to offer seamless secure payment mechanism?

9. Who would be responsible for data theft in case of wireless hacking?

10. And many more

All investors are rushing to invest in e-Retailer in hope that down the line the online market space will mature and they will make money out of it. In my point of view, that is over optimism as retailers must focus on innovative approach to attract user and offer secure solution. Creation of Mobility Applications as well as offering product at discount to attract user is not going to work in long run. They invest heavily in promotions but given the total internet user base in India, it’s not justifiable.

India is a place of organized retail market and if e-Retailers want to entrench that segment to attract user towards their platform, they must focus on platforms and delivery mechanism supported with extraordinary consumer support management. Post aggressive push by International players such as Amazon it would be extremely difficult for home grown players to match them as International players already crossed the teething problems and exactly know the consumer dynamics and nodal points which works with consumers. Hiring top grad is not going to work but viral connection with end consumer is going to work. Indian marketplace is Atypical where any new approach gets lots of attentions. Once consumer experiences any issues then it’s a lost customer forever.

In the mobility approach home grown retailers must recognize that the money they spend on Print can be used to acquire consumers in one or another way. It would bring better conversion probability compared to current approach. In my views, early growth attach to any new sectors are in exponential curve and subsequently in high single digit. We must learn this aspect with growth story of Telecom sector. I also believe that some of the players would come up with strategy which is going to crack the potential and consumer adoption but for that strategy needs to be completely out of box rather than copycat.

Mantra to be successful in Indian Application Market

The recently loved domain of Telecom industry is Applications post exponential growth in Smartphone. The ongoing and projected growth story around Smartphone created lots of optimism among Applications providers to cash in after you approach.

Some of the Applications providers instantly achieved good traction and number of Applications are being pushed towards mobile users. Interestingly, the surge in Smartphone growth pushed most of the companies started realizing the value of mobility user and jumped in bandwagon to offer Application to capture additional customer stickiness and any opportunity to generate revenue.

Many companies as well as Applications developers rushed to capture consumer base without focusing on the basics. Most of the companies based on my opinion post reviewing many Applications missed to

· Understand Indian Regulation

· Understand their Do’ and Don’t w.r.t user information

· Understand the logic of Terms and Conditions

· Understand the Security regulation of India and its importance

· Protect Consumer and Prosumer personal information

· Understand Indian regulation on Infrastructure hosting to offer Applications or its associated services to consumer or prosumers

· Understand to respect Private and privacy policy of India

· Understand consumer and prosumer requirement

· Understand consumer usage pattern

· Understand consumer paying pattern

· Understand consumer preference management

And Many More

Most of the companies only focused to collect contextual information and focused in monetizing the same. The business environment would be totally different if Applications providers will start focusing on above mentioned point. The implementation of above would be time taking and require cross segment expertise both in technical and business to map and evaluate conflict analysis.

I strongly believe that post recent initiative by TRAI and other regulatory bodies situated in MHA, FM would come up with regulatory mechanism which is going to increase Applications offer very expensive but would automatically clean many organization offering Applications by violating Land of Law in and out.

Why Microsoft move to position Nokia Android Device may falter

Just before closing Nokia deal, Microsoft played strategically. They positioned Nokia Android device without being held responsible for recognizing Android success. The projected price and performance of proposed Nokia Android device is not fulfilling the competitive threshold. On minute assessment it’s clear that there are other players offering better specifications at 20-30% lower price points. The Camera specification of 3MB without any front camera support is one of the weakest linked coupled with RAM specs whereas now standard is minimum 5MP and 1GB RAM.

Interestingly, Microsoft in the last few quarter realized it loud and clear that there Lumia play is not picking up as Average selling price is going down and they are not getting good traction in major geographies like US. The other realization by Microsoft that Nokia is king of low end device and major adoption of Asha platform based device left them vulnerable of losing market share in case of Microsoft insistence of constantly focusing on Window Mobile OS push.

In IDC released report, Nokia capture more than 14% total device market share in India where the market size is around 250 Mn per annum but unfortunately they were pushed out of top 5 Smartphone in India. It is indicative that Microsoft cannot afford to let go huge chunk of loyal Nokia customer. They also realized that it would be better to adoption strip down version of Android to broaden the probability of market share gain rather than keep on focusing on Asha platform.

As, I constantly reminded post Microsoft announcement of Nokia that Microsoft is not interested in device but using it as a medium to promote its other services. The upcoming Android powered device is nothing but validation of my raised point. Most of the Microsoft product such as Outlook, Bing, Cloud services, one drive, Nokia Maps, Nokia Store and BBM is going to be integrated in order to capture some of the traffic from Google.

Microsoft and Nokia must recognize competitive landscape in Android ecosystem where every alternate day there is price reduction by one or another OEM’s whereas the suggested price point of Nokia upcoming Android device to too pricy and may face uphill task to command premium from consumer with many of Android ecosystem features are missing. I strongly believe that the move is going to bring additional potential customer on their deck but it would be difficult for their sales team to convince users to use device which is so much Microsoft centric. We all must admit that Google did one thing beautifully that now most of the Android ecosystem users are used to use Google centric services. The change in environment may turn out to be show stopper of Nokia to get their adopted apart from Price points.

I will keep my finger crossed and would wait eagerly to see the potential traction by Nokia.

Tuesday, 4 March 2014

Draft Telecom Security Policy – First potential salvo from Regulators to control misuse of user contextual pattern

The Indian regulatory bodies in a correlated effort came out with draft telecom security policy fulfilling the requirements and expectation of home ministry to lawful agencies. The proposed policy would put the onus of user information protection to Telecom ecosystem players.

In my recent blogs, I have been raising the concern of used mechanism of diverting user contextual information by the companies to take the undue advantage of user preference. There are “N” number of Applications offered by domestic and international companies by taking the consent of user under Terms and Conditions which none of the applications user read.

Even after repeated attempt by Indian regulators, many companies managed way around to keep on retrieving user information which intern affected end user. I am also sure that many of the users must be receiving redirect attack. On personal basis, I received many and charged premium tariff for the same. The first query pops up from the same that how come such traffic pass through claimed secured network.

Post the higher adoption of Applications and Off Net hosted service offering through cloud started violating many Indian regulations. Interestingly many companies offering through that said model don’t even get bothered to look into regulatory and always focuses on legal compliances.

The proposed regulation implementation is going to create the same havoc the way MVAS regulation created in India. When I look into the current scenario of in and out security breach, I believe that its utmost important for regulator to enforce all. The current and expected trend of m-commerce and m-payment adoption, it is important for all to make sure that device based malware or phishing to network centric vulnerability donot happen otherwise it may cripple the whole ecosystem. It is also clear that many security breaches are not being reported to lawful agencies whereas lawful agencies are not being able to tap in the user initiated information due to lack of infrastructure compliance by the service and other ecosystem players. The proposed one is going to be boom for some companies and bust for many. Many top notch Applications offered by International companies may see their business opportunity dry down in no minute if the draft gets converted into policy.

Saturday, 1 March 2014

WhatsApp & FB Deal Educated Many – Voice Initiative Must Brace for Surprises in India

The acquisition of WhatsApp by Facebook attracted pro and cons assessment. As I mentioned in my previous blog that Facebook intention was simple and that was to eat out potential competitor. The deal brought Oracle acquisition of PeopleSoft, Siebel and SunMicrosystem to protect their turf and pricing power.
Facebook also realizes that their major chunk of active user base is from Emerging countries including India and WhatsApp India user base is around 35 Million. Whatever is the deal proposition but it offered enough insight about hidden revenue potential by indirectly targeting user base.

It also opened multiple open issues which industries and regulators are trying to answer. Some of them are as follows

· What is the use of UASL regime in India if any OTT players comes in and capture market with minimum to no investments?

· Is there any regulatory loop hole which is being used by OTT players?

· Do OTT players know about Indian regulatory environment and its implications?

· Did regulators neglected OTT segment and missed to regulate the same?

· Why telecom operators are forced to buy in spectrum to offer Voice and text services when the same can be realized without buying any spectrum?

· Why regulators missed to identify the revenue leakage from OTT applications where OTT players used data path to reach out to user base and indirectly inflicted Mobile Operators with major revenue drainage?

· Why Applications segment is non-regulated?

· Why OTT players using Telecom network path as delivery mechanism are not being forced to buy in licenses?

· And Many more

The above queries are only few one and it clearly offers one answer that regulators must be more visible in order to maintain level playing field. Interestingly, major service providers as well as government officials also started talking about regulating OTT players.

One must recognize that OTT players offer great level of value to end user but at the same level inflicted major impact in negative way to Telecom ecosystem.

The recent announcement by WhatsApp that they would be coming out with Voice enabled service. With the attached service like social networking, messaging and voice, Facebook may kill their competitors.

It is widely expected that Facebook may face lots of hurdle from Indian Telecom ecosystem even though Facebook CEO met Indian Telecom Sector visionary to expand initiative.

I am pretty sure that the Indian Telecom regulators, MHA, Intelligence Agencies will not leave any stone unturned to make sure of compliance as well as monetization for government.

It would be interesting how Blackberry position its BBM service against impeding move by WhatsApp