Regulation of cyber cafes in India

I found this article over at BusinessWeek interesting. The article shows how regulation can stifle business activity, even if it is not price regulation.

There were some useful facts buried in the article that I'd like to pull out, though:

... India is trying to increase household PC penetration, which is currently at just 2 PCs for every 100 households, says the technology trade group NASSCOM, and broadband connectivity, an abysmal 4 million connections, vs. China's 3.2 million new connections every quarter, according to BNP Paribas. Even Vietnam, with a population of just 84 million, is signing up 120,000 new broadband users per month, according to IDC.

Tower sharing in India

This article in Forbes contained some interesting tidbits about tower sharing (in India, in this case). Quoting the article:

Last week, Bharti Airtel’s subsidiary Bharti Infratel, Vodafone Essar and Idea Cellular said they would merge their wireless-infrastructure businesses to cut costs and improve efficiencies. Vodafone Essar and Bharti will each own 42% of the new company that results--Indus Towers--and Idea will get 16%.

The companies all operate on the global system for mobile communications standard. They will merge their infrastructure assets, totaling 70,000 towers, in 16 of the 22 demarcated telecommunication zones. Media reports said Indus Towers would fund expansion through debt and could venture a public offering two years on.

Other facts about the Indian market from the article are:

India’s mobile market added nearly 8 million subscribers in October, the largest gain in the world, along with China. But intense competition has ensured tariffs are as low as 2 cents a minute.

[... snip ...]

... as record subscriber growth overcrowds the airwaves, Indian telecom players are now engaged in a legal battle over precious spectrum allotments from the government.

Wireless Use in India

This article presents some interesting facts and perspectives about wireless use in India. Some exerpts:

• The number of Indian consumers accessing the Internet from their phones doubled in the last year to 38 million (from 16 million).
• The number of Internet connections that occurred via PC declined to 9.22 million in the second quarter (from 9.27 millian in the first quarter)

I think this underscores the utility of mobile technologies in a wide variety of economic circumstances, and underscores why companies like Nokia and Motorola have been targetting this market

WSJ on mobile in India

This article in the Wall Street Journal is interesting (subscription required). What I find particularly interesting and useful are the cost and operational data. Quoting the article:

Cellular providers initially tapped developed markets, and when those were saturated, big cities and suburbs in the developing world provided easy growth. But to expand further, cellular companies want to reach hundreds of millions more potential customers who live outside the main population centers.

Almost two billion new subscribers are projected to start using mobile phones in the next five years, and 80% of them live in developing-world markets, according to estimates by Sweden's Telefon AB L.M. Ericsson. In India alone, more than seven million new cellphone subscribers recently have been signing up each month, bringing the total close to 200 million subscribers in a country of 1.1 billion.

The economics of that growth get dicey. Indian cellular companies charge less than two cents a minute, among the lowest rates in the world, and the average bill is under $10 a month compared with about $50 in the U.S. The more that cellular companies penetrate India's rural areas, the higher the costs to set up and maintain networks. Yet rural customers, living on an average of less than $2 a day, tend to spend even less on phone service than their wealthier urban counterparts. Only companies that can cut costs while expanding their networks can profitably pursue the untapped market.

[snip]

Already, Bharti is reaching customers whom it didn't consider worth pursuing not long ago. In July, Bharti commissioned one of its newest towers in the sleepy village of Madilage, about 300 miles south of Mumbai. To let the villagers know cellular service had arrived, Bharti staged a traditional dance performance on the back of a truck parked under the new tower. About 500 villagers -- a fifth of the local population -- gathered to watch the show and learn how cellphones work. "Incoming calls are totally free!" announced the Bharti emcee.

Peanut farmer Sandeep Pati, 23 years old, is one of the first subscribers in Madilage, but his investment -- he says he spends less than $20 a month on calls -- is already paying off. He rents out his tractors to other farmers and his cellphone means he can arrange more rentals quickly with less downtime. "I can run my business even from the field," says Mr. Pati outside his simple home, where his water buffaloes sleep on the ground floor below his bedroom. "When I had problems with the tractors before, we would just have to leave it where it was for a day, now I can call and get it fixed right away."

[snip]

The cost of building and equipping a Bharti tower has dropped around 40% to $75,000, while the time the average rural site runs on diesel generators has been slashed to four hours a day from eight, Mr. Price says.

Bharti has survived the competition and emerged as India's largest cellular operator by number of subscribers, now 47 million, and a 28% share of the market. In the year ended March 31, earnings jumped 89% to $1.06 billion, as its net profit margin rose to 23.0% from 19.4% a year earlier.