Telecom Daze

The past week was filled with iPhone related news in the Indian press as the launch neared.  The actual launch was a joke, the phone was stupidly priced at USD 824 for the 16GB iPhone 3G. 3G the biggest features was missing, why? Because India does not have 3G running on it’s network, and to me that’s the bigger story. For all the talk about the “mobile revolution” it’s pathetic to think India has no 3G due to political reasons. For quite some time The Department of Telecommunications (DoT) and Telecom Regulatory Authority of India (TRAI) have been playing politics and delaying the auction for the licenses which some estimate could be as high as Rs. 40,000 CR (USD 10 billion).  That’s some serious coin and much needed since the gov’t just bailed out farmers and gave all gov’t employees a pay raise. 

The other telecom news is the recurring rumor of an IPO for the state owned telephone provider BSNL.

“The company is valued at well over $100 billion. We are looking at offloading up to 10% stake, subject to government approval,” BSNL finance director S K Saxena told reporters. When asked about the development, telecom minister A Raja said: “The government is considering it (an IPO). The department of telecom (DoT) will discuss the issue and take a final decision soon”. 

Yup, another USD 10 billion to the government if everything goes as planned. Personally, I would not invest in BSNL since it’s a typical state owned entity that is fast losing customers to the wireless companies. And more importantly BSNL does not service Bombay or Delhi – the two biggest metros in India and where product innovation occurs first. But, hey if they pull it off and retire some of the government debt I’m all for it.

Quiz time: What does BSNL stand for? Bharat Sanchar Nigam Limited (translation: lame customer service and pathetic product set).