Get Out, Get Going!

Telecommunications. One of India's fastest progressing markets. And a victim of government's moves too, it seems.

Use of cellphones in India has incressed at an excellent rate and we have more than 20 crore users, with an overall mobile penetration of almost 17%. But the market has lots of opportunities to grow which we can guess with the number of attractive schemes launched by the companies and public's response to them. It is also worth noting that even though we have a high rate of increase, we are still far behind the global mobile penetration of 44%.

In such a market, the fierce competition among various mobile companies is natural. But the way the government is trying to encash the growth, using not-that-ethical ways, cannot be considered as a very good practice. For example, the way govenrment asked for more money later on the spectrum allocation was out of understanding. If the 1651 crores was the 2001 price, it should have been changed earlier itself.

Probably this is one of the main reasons they're all moving out of country too. Yes, the telecom biggies of the country have started finding places outside. The CDMA giant of India, Reliance Communications, has acquired a licence in Uganda and is planning to invest big money in the African country. It is interesting that there are already 5 companies, MTN, Uganda Telecom, Hits Telecom, Celtel and Warid Telecom, with whom Rcom shall have to compete. The company is expected to start its operations by the end of 2008, and is planning to provide GSM, Wi-fi and Wimax services there.

On the other hand, the GSM giant Bharti Airtel had already announced its launch in Sri Lanka in January'07 and is expected to start its services by April '08. Sri Lanka, Bharti is keen to roll out Airtel in several Saarc countries, such as Nepal, Maldives, Bangladesh, Bhutan and Pakistan.

In fact, reportedly Bharti is trying to get an operating licence in Vietnam also, without any buy outs. Thus, our companies are really going the international way.

And above this all, Mukesh Ambani has recently made an statement saying RIL will emerge as a "successful multinational" by focusing on overseas business. Tatas are already going more global everyday with the buyouts like Daewoo Motors and Corus.

So the funda is simple now, if you want to progress high, get out and get going.

All Set to Fly?

69 cities. 76 aircrafts. 570 daily flights. This is going to be India's largest ever airline. Courtesy Vijay 'Kingfisher' Mallya, the king of good times.

Accenture, the well known consultancy firm has suggested a merger of the newly redesigned Simplifly Deccan with the UB group's Kingfisher airlines. The merger is expected to take place soon and may be complete by the coming March. We know, the common man's airline, Air Deccan was taken up by the UB group recently and major changes were made to change the image and overall feel of the airline.

With the merger of the two airlines, Kingfisher will be able to fly abroad also as according to the aviation's rules, airlines need to fly for a certain period in only domestic skies before they can fly in international skies, and Deccan has the required amount of experience as it had come considerably earlier in the market.

Also, the losses of the companies, 1200 cr for the Kingfisher and 800 cr of Deccan can be better controlled, experts say.

And according to tax experts (read manipulators), it is possible to have a clever deal of the two companies, too, which will profit the companies.


But here comes the question. What will happen to the prices of Deccan when it becomes Kingfisher? Will the common man's flyer Deccan be out of common man's reach now or 'the King' Mallya will keep at the same price band where it is today, is the question which is yet to be answered.

In any case, there is nothing to really worry about. Except that the common man who taught us to fly will not be flying with many of us anymore, if Deccan prices become that of Kingfisher. Because today we have a two digit number of domestic carriers operating in India many of which provide equally cheap tickets as Deccan.


So don't worry, just tighten your seat belts. Happy flying. :)

Yet another magic on its way

Yet another retail chain to launch soon. So what's new? This time its going to be somewhat different. This time the stores are going to provide us with material for our cellphones. That is, games, movies, music and other applications. The chain will be called Media Magic, and originates from a Maharashtra based company called Mobile Magic.

The company is planning to open 10,000 retail stores within a span of two years that makes it clear that the company will be targeting people from not just metros or cities but even small towns. Currently the company is considered to have a catalog of 500 movies and 5000 songs.

The company is in an exclusive tie-up with Hungama mobile and movie-giant Shemaroo will also be providing its content to Media Magic customers through a strategic tie-up.

Income Taxes Down again?

If Economic Times is to be believed, direct taxes are to go down once again. The tax exemption limit is expected to be raised to 1,50,000 from existing 1,10,000 and slabs are expected to be 10% for 1.5 lacs to 2.5 lacs, 20% for 2.5 to 5 lacs and 30% for above 5 lacs.

In this scenario, the taxes paid will be reduced by significant amounts for everybody. For example if I pay taxes for an income of 3.15 Lacs, I have to pay almost 43,500 + 10% surcharge making it almost Rs 48,000. But in the new scenario, the taxes come out to be:

(2,50,000 - 1,50,000) x 10%
+(3,15,000 - 2,50,000) x 20% = 10,000 + 13,000 =23,000.

Plus, this is also a possibilty that the surcharge is removed. Even if its not, tax will be 23,000 + 2,300 = 25,300, which is less than salary of a month.

Now, all we can do is hope that the ET guys have got the right news.

Reliance - Now in DTH

Once it was Reliance that brought mobile phones in the hand of common man. And probably this time the history is going to repeat itself. This time Reliance is all set to jump into the market of Direct-to-Home (DTH) service. The services are expected to start by March '08.

Following the same old path it has always been following, Reliance is this time in a mood to have a contract with Toshiba to provide 15 million new TV sets which will be provided with the DTH connections. The package is expected to cost somewhere around Rs 10,000-12,000.

The entry of Reliance in the DTH market is expected to be interesting. As the last time when Reliance entered the cell phones' market, the condition was pretty much the same. Cell phones were there in the market but the costs were keeping them out of reach of the common man and suddenly there was Reliance that brought calls at 40 paise/min and then phones for as low as Rs 500, which made others slash their rates and the result we all know.

This time too, its a lot similar yet. Although big players like Dish TV and Tata Sky are there in the field, DTH is a technology limited to a limited number of people yet and people prefer to bear with their cable operators only. For the reason, companies like Reliance and Airtel, that are soon to enter the DTH market are lobbying to get the Condition Access System (CAS) made mandatory in the 55 cities government was planning to bring it.

This is also known that the Airtel DTH is all set to release but the company is waiting for a good time to enter the market. In this situation, what will be the future of Reliance Blue Magic and Indian DTH market, will be worth watching.