Foreign mobile operators including Etisalat will have a tough time making a go of it in India unless its regulator eases restrictions on acquisitions and roaming, industry experts say.
India is the second fastest-growing mobile market in the world behind China, with a record 20.3 million new users added in March, figures from the Cellular Operators Association of India (COAI) show. The world's second-most populous country had 621.28 million mobile subscribers as of last month, about one account for every two Indians.
But the country's fragmented market - with up to 17 operators offering mobile service in a single area - makes it difficult for the companies to build up the scale they want, much less make a profit.
India's auction of the promising 3G spectrum earlier this month did not change the outlook despite the rich bidding. No bidder landed a nationwide presence.
It wasn't for lack of cash. The bids totalled 677 billion rupees (Dh53.22bn), almost double the amount industry observers had forecast. The auction's big winners were Bharti Airtel, Reliance Communications and Vodafone Essar.
The auction results highlight the potential of the market despite low demand for 3G services, said Bhupendra Kumar Modi, the chief executive of Spice Group, a major mobile phone maker and retailer in India. "3G will be a destructive technology," he said.
"You have Vodafone, for example, with half of India and they will destroy the 2G [spectrum] players. But in the areas they do not have 3G, they will be the ones who will be destroyed."
The 3G spectrum allows mobile operators to offer more lucrative services, including internet access, than the older 2G band.
Analysts and the companies themselves expect that without national providers, industry consolidation is inevitable. But there are obstacles.
What is currently preventing operators from making money "is that there are stringent restrictions on acquisitions for new operators and how spectrum can be shared", said Rahul Matthan, the telecoms partner at Trilegal, an Indian law firm.
"There is the potential for operators to hoard spectrum and increase the value of spectrum. Lots of spectrum is underutilised of which the value could be unlocked."
There are other signs of instability in the market, such as weak pricing. Average monthly mobile spending in India fell 3.4 per cent to 150.23 rupees for the first quarter of the year from the previous three months, according to COAI. And the mobile rates offered by new entrants such as Etisalat continue to fall as they battle to establish themselves.
The falling prices mean the Indian government must fine-tune its regulation to spur competition between incumbents as well as new entrants through roaming agreements and acquisition legislation, said Andrew Sharpe, a telecoms partner for the law firm Charles Russell in Bahrain.
"[Operators] crippled themselves by choosing an auction where gaming theory teaches us that the main players will bid loads of money," he said.
"The question is how good is the regulator going to be at regulating how competition works in all these different regions."
Mr Matthan believes the authorities will act promptly. "There has been considerable movement in the government in the past six months to take a close look at [merger and acquisitions] restrictions and in the next three years, probably regulations will be introduced."
The outlook for Etisalat, which operates in India under the Cheers Mobile brand, remains mixed.
The operator did not win any spectrum after India's 3G auction bidding passed the US$2bn (Dh7.34bn) mark, so the money it did not spend in India can be invested elsewhere or on another acquisition, said Irfan Ellam, a telecoms analyst with Al Mal Capital.
Mohammed Omran, the chairman of Etisalat, has said for years the company wanted to be a big player in India and would use acquisitions to fuel its growth there.
But Mr Modi, an industry veteran who sold off his mobile operations based in the states of Punjab and Karnataka for 27bn rupees in June 2008, disagrees.
Without any 3G spectrum, Etisalat's days in India are numbered, he said.
"They paid a high price for their 2G," Mr Modi added.
"They wanted to come into the market so badly that they wound up paying a premium for their licence. Now, without any 3G, they'll have a tough time."
dgeorgecosh@thenational.ae
Profile
Company: Libra Project
Based: Masdar City, ADGM, London and Delaware
Launch year: 2017
Size: A team of 12 with six employed full-time
Sector: Renewable energy
Funding: $500,000 in Series A funding from family and friends in 2018. A Series B round looking to raise $1.5m is now live.
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The specs: 2018 Renault Megane
Price, base / as tested Dh52,900 / Dh59,200
Engine 1.6L in-line four-cylinder
Transmission Continuously variable transmission
Power 115hp @ 5,500rpm
Torque 156Nm @ 4,000rpm
Fuel economy, combined 6.6L / 100km
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
The specs
Price: From Dh529,000
Engine: 5-litre V8
Transmission: Eight-speed auto
Power: 520hp
Torque: 625Nm
Fuel economy, combined: 12.8L/100km
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
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The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young