Messages

91

Technology / Cloud Migration - Amazon Vs IBM / Oracle / Microsoft

« on: April 19, 2018, 01:21:36 PM »

Amazon has not gone far enough to acknowledge enterprises' need to make a gradual move from on-premises, data center-based IT operations to cloud-based operations.  And the company?s insistence that customers go all-in could hinder progress by giving it a reputation for being too cloud-centric with a lift and shift mentality.

Amazon's rivals, including Microsoft, IBM and Oracle, are able to resonate with customers' operations teams looking to make gradual moves to the cloud, initially through private/hybrid cloud scenarios. Amazon is already at a disadvantage compared to traditional software providers with their mature professional services organizations. The company relies heavily on partners to provide customers with support for digital transformation projects that require on-premises data center support and verticalized, specific use case solutions.

Amazon needs to lower the barriers to cloud adoption by pre-building as much functionality as it can for specific use cases to the benefit of both customers and channel partners. Otherwise it will lose out to closest cloud rivals Google and Microsoft.

92

Web 2.0 / The industrialization of digital commences at Accenture

« on: December 22, 2017, 11:04:10 AM »

Accenture management indicated commencement of industrialization of digital services and increase in size of digital projects. It will be interesting to see if clients segregate large digital projects and work with a number of niche vendors or opt for scale vendors with a track-record of delivering complex integration projects. Select Indian IT companies may benefit if the latter materializes.

While Indian IT has been a late entrant in digital, the companies have stepped up investments and gained momentum in the recent quarters. It remains to be seen whether Indian IT capitalizes on industrialization theme and if it results in growth acceleration in FY2019.

93

4G / LTE / Jio Users Consume 7x Data Volume of Airtel

« on: October 31, 2017, 02:09:46 PM »

Jio Data usage per subscriber was robust 9.6GB/month vs. 3GB/month on the top incumbent's network. Jio's data volumes on the network were ~7x Airtel's data volumes. Minutes of usage per subscriber per month were 626, 1.2x that of the top incumbents.

RJio added 15mn subscribers in the quarter ending September 2017. RJio suggested that most of the users are on the Rs399 or higher plan. Customer churn is at 1% per month, and the company expects it to diminish further. Call drop rate has been <0.4% with 100% network availability time. According to TRAI, Jio has 18Mbps download speed on the network.

With ~160mn 4G smartphones currently in the market, Jio has 85% market share there.

94

4G / LTE / Jio Increases Addressable market with feature Phone Launch

« on: October 10, 2017, 07:22:06 AM »

Reliance Jio launched its much-awaited 4G feature phone The device is priced at INR1500, collected as a fully refundable deposit, refundable at the end of three years. The phone has a 2.4" QVGA screen, bundled Jio apps and will not be compatible with non-Jio SIMs.

The company is targeting shipments of 5mn phones/week. The monthly plan for INR153 would offer unlimited voice/SMS and 0.5GB of data per day. There are two sachet plans for INR24 and INR54 with validity of two and seven days respectively. The phone can be connected to TV through a Jio Phone cable. However, this will require enrollment to the INR309/month plan (1GB/day allowance) which will allow 3-4 hours of daily video streaming.

In addition, it was also limited in addressing the lower ARPU customer who are feature phone users (installed based >500mn). We believe that the launch of 4G feature phone and investing in developing this ecosystem will increase the addressable market for R Jio significantly. The company is also planning to increase its network coverage to >95% by Mar-18 from >80% at present.

95

4G / LTE / Idea 4G Expansion Slower than Expected

« on: October 04, 2017, 02:15:23 PM »

Idea Cellular's progress on 4G rollout has been slower than expected. We understand that Idea has spread its 4G network across circles, which means that its established circles do not have sufficient 4G coverage to prevent subscriber churn to other networks. Spiralling debt burden (interest almost equal to Ebitda in the worst quarters) for Vodafone and Idea would inhibit capex unless there is equity infusion or monetisation through tower sale. Even after the merger is completed, integration issues are likely in the initial stages.

We understand that Idea and Vodafone are committed to infusing equity if certain debt thresholds are breached, as per their agreement. Also that doing capex in haste means losing value after the merger assuming that capacity synergies start to come through over time. Even after the merger is completed, integration issues are likely as Idea/Vodafone have different vendors for 2G, 3G, and 4G in various circles.

96

SmartPhones & Apps / Jio Phone Complete Hardware Specification

« on: October 04, 2017, 02:02:23 PM »

The Rs 1,500 JioPhone specifications is as under after having used and unboxed the same.

Network Technology True 4G (LTE Support): VoLTE (HD Voice Call), Video call support

LTE Bands Supported: BAND3(1800)/BAND5(850) LTE?TDD BAND40(2300)

Display Screen Size: 6.09cm (2.4inch); Screen Type: TFT screen; Screen Resolution: QVGA (320 x 240)

Connectivity Wi?Fi: 802.11 b/g/n; Bluetooth: BT 4.1 with BLE; GPS: Yes; USB Connectivity: USB 2; NFC: Yes

Platform Operating System: KAI OS; CPU: 1GHz Dual core Processor

Battery Capacity: 2000 mAh, Li?ion; Talktime: Upto 12 Hours; Standby Time: Upto 15 Days

Memory Internal Memory: 4GB, RAM: 512MB; Expandable: Upto 128GB

Camera Rear Camera: 2MP; Front Camera: 0.3MP; Video Recording: Yes

Multimedia Music Player: Yes; Wireless FM Radio: Yes; Video Player: Yes; Loudspeaker: Yes; Alert Type: Ringtone + Vibration

Apps Support Jio Apps: MyJio, JioMusic, JioTV, JioCinema, JioXpressNews, HelloJio, JioVideoCall, JioShare, JioGames etc.
JioStore: More apps can be downloaded from JioStore app

Features Hello Jio: Your personal Voice Assistant with voice enabled search (English, Hindi) Compose SMS, Search on Google, Open app, call contact and much more

Connect To TV: Connect to CRT TV, Smart TV etc using JioMediaCable (to be bought as separate accessory)

Browser: 4G internet browsing

Other features: Torch, calculator, alarm, calendar, gallery etc.
Box Contents Handset, Removable Battery, Charger Adaptor, Jio SIM CARD
Other Details SIM Slot: Single SIM
SIM Size: Nano Sim (4FF type)
Color: Black
Indian Language Support 22 Indian languages? Assamese, Bengali, Bodo, Dogri , Gujarati, Hindi, Kannada, Kashmiri, Konkani, Maithili,
Malayalam, Manipuri, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Santhali, Sindhi, Tamil, Telugu and Urdu

Other Compatible Accessories - Charger with 5V, 700 mA rating; Standard 3.5mm jack for audio; JioMediaCable; JioFi for wifi access

97

4G / LTE / JIO unlikely to cut prices despite IUC cut

« on: September 27, 2017, 11:43:51 AM »

JIO has been paying IUC of ~Rs6bn per month in its largely urban network with smartphone subscribers. With this cut, JIO?s IUC net
outflow to the rest of the telcos will fall sharply. Whether JIO ploughs back these gains or retains them would depend on a number of factors.

JIO?s smartphone plans are at a deep discount to the market, but its feature phone plan is on par or even at a premium to the ARPU of featurephone users. One can argue that JIO can gun for higher market share at a faster pace by cutting prices, and one that objective is achieved, attempt to take prices up gradually. Indeed, JIO?s entire strategy has been based on this ? a steeply discounted entry followed by consolidation.

Further, JIO's (largely urban) network utilisation is quite substantial. Demand has proved to be robust with subscriber adds of more than 5m per month consistently even after a recent tariff hike ? these two factors hardly paint a circumstance in which JIO will gain by dropping prices. Incremental rollout is going to be largely towards the rural/featurephone offering.

In rural areas, JIO?s feature-phone push is likely to be constrained by handset supply. We understand that JIO is attempting to raise
manufacturing capacity anticipating healthy demand, and this at the announced price of Rs153/28 days pack that offers 0.5GB/day and
unlimited voice. It is possible that JIO could introduce a lower  denomination pack later to expand the addressable feature phone
market, but supply constraints will make this a lesser priority.

98

Technology / Most Promising Online Payment Startups

« on: August 30, 2017, 01:52:02 PM »

We believe traditional merchant acquirers will lose online payments share to acquirers like PayPal, Adyen, Stripe, and Wirecard who have more advanced technology solutions and who serve more online-first merchants.

We have other startups like Affirm and Klarna are seeking to reduce friction and transform retail lending online.

We believe scaling a presence in peer-to-peer (C2C) payments will be of greatest value in emerging markets given a large under-banked population and lack of tech-enabled banking, as it can establish a user base upon which a larger payment presence can be built. We have seen this play out with mobile money transfers in the past 10 years, and believe China and India are well down this road. In the United States, Venmo has successfully built a loyal millennial user base that can be monetized in the future.

99

FTTH Broadband / Broadband Subscribers in India at 422 Mn

« on: July 31, 2017, 11:26:55 AM »

The Minister for Communications informed that based on information provided by TRAI, as on March 31, 2017 there were 422.2 mn broadband users in India and internet penetration was at 32.9%.

The National Telecom Policy 2012 aims to have 600 mn broadband connections by 2020. Under the BharatNet project, the government aims to provide 100 Mbps broadband connectivity to 0.25 mn village administrations (Gram Panchayat) by March 2019. As on July 23, 2017, optical fiber cables has been laid in 0.1 mn gram panchayats and broadband connectivity has been provided in 25, 426 gram panchayats

100

4G / LTE / Idea VoLTE Launch in 2018

« on: July 31, 2017, 11:23:27 AM »

Idea Cellular got it completely wrong on the 4G front. They started late on the CAPEX with Network cost increased qoq due to higher electricity charges and general expansion. Access charges increased due to higher adoption of unlimited plans which lead to higher IUC cost.

Idea has no intention to subsidise handset cost but will partner with handset vendors to bring down the cost of material and match JIO's price point. VoLTE should be launched by early CY18.

As per management data rates have bottomed out but realisation will fall further due to higher adoption of unlimited plans which currently stands at high single digit; data price to stabilise at Rs 30-40/GB. With current capex outlook, Idea can support more than 10x increase in data traffic.  Management indicated that data subscribers have started growing from the month of June and this trend is likely to sustain as the company has significantly augmented its data network.

101

4G / LTE / Jio New Plans Still Cheaper than Airtel / Vodafone

« on: July 13, 2017, 02:00:42 PM »

Jio's Subscriber ARPU per month in the recently announced plans works out to Rs166/Rs143, which is higher than ARPU of Rs110 implied for the Dhan Dhana Dhan plan. This may seem a relief for A-Vo-Id Operators, and it brings relief to smaller telcos that were getting priced out by JIO, though they seem to have thrown in the towel. Having said that, JIO remains cheaper than A-Vo-Id Operators  on data pricing.

The Summer Surprise (SS) offer of most of JIO?s 72m paid subscribers as of end-March will expire in early August. Hence, it is
surprising that JIO chose to raise pricing ahead of this lumpy renewal, which we interpret as a sign of increasing confidence (it is
unlikely that JIO missed this consideration, or it was probably exhausting budgets or reacting to adverse publicity relating to
"unprecedented disruption from a new entrant"). JIO currently has ~87m subscribers. We expected a smaller increase followed by
another increase a couple of months later.

102

3G / HSPA / EVDO / Vodafone + Idea Merged Co Expects Market Growth for RMS Compliance

« on: July 03, 2017, 09:53:35 AM »

TRAI allows a period of 12 months post-merger to comply with the 50% RMS threshold rule. So, if the merger is effective Jun-18 (i.e. all approvals obtained within one year from now), then Idea/Vodafone has time till Jun-19 (two years from now) to make the adjustment. During this 2-year period, RJio will register revenues taking share, largely against the smaller players, which should not impact the combine too much by way of needing to cede excess revenues. Sure, if the India telco market gets back to a robust growth trajectory, revenue dis-synergy is not as big a concern as the current Math (worryingly) suggests ? it means that the combine wouldn?t need to cede much absolute revenues in Jun-19 as it will have had a lower % (closing the gap to 50% threshold) of a larger industry revenue base.

But what if the market does not grow nearly as much as the combine expects and has estimated in the merger model? In a stagnant market, even if we assume that RJio will take share substantially against the smaller players, Idea + Vodafone?s high RMS will require the combine to cede revenues. To the extent that RJio takes more revenue share from Idea + Vodafone in a stagnant market, the combine has ceded the excess revenues upfront ahead of TRAI-deadline taking effect, in any case.

103

FTTH Broadband / Lethargic Airtel Took 15 Years to Care for Customer Innovation

« on: July 02, 2017, 08:46:29 PM »

Airtel one of the Leading Broadband Service Providers in India took a whopping 15 years to actually care for its customers by putting some innovation.

Due to Monsoon, it is quite customary in India that the voltage will fluctuate and burn your Broadband modem. Protect your Modem is something Airtel has come up with now.

STEP 1
Keep the device connected to the UPS.

STEP 2
Switch off the modem when not in use.

STEP 3
Keep the device in the centre of your house for better connectivity.

STEP 4
To troubleshoot, switch off the device and turn it back on after 2 minutes.

STEP 5
Protect the device from dust to ensure better  performance.

But a lot needs to be done yet not sure which fuc**ing product managers has Sunil Mittal hired for designing customer care at Airtel.

104

Cable / DSL Services / How Internet Disrupted Global Business Models ?

« on: June 30, 2017, 10:46:28 AM »

Technology and the Internet of Things are eroding pricing of nearly everything to zero, yielding a world of zero marginal costs and one of almost unlimited scale. While destruction started in retail and services, it is now impacting manufacturing supply chains. At the same time, attempts to keep conventional private sectors alive (via aggressive financialization) leads to ?zombie companies? and persistence of overcapacity.

In our view, these two forces (technology and over financialization) eradicate corporate pricing power and destroy conventional labour markets, unleashing deflationary pressures while depressing productivity. It also explains a spate of M&A and lack of conventional fixed-asset investment.

105

SmartPhones & Apps / Size of Digital Payments Market - US$350-400bn

« on: June 29, 2017, 07:21:58 AM »

In India, Trailing 12-month ATM withdrawals have hovered around US$350-400bn in the last 2 years. In comparison, the total value of card transactions at POS (trailing 12 months) was US$100bn in April-17 (vs US$50bn 2 years ago), while mobile wallet transactions were US$9bn (in April-17) (vs US$1bn 2 years ago).

We believe greater adoption of digital payment tools (like mobile wallet, IMPS/UPI, card transactions at POS, mobile banking) could affect the share of ATM withdrawals.

The Indian consumer payments market could be segmented as:
a) a segment that earns digitally (ie income straight into the bank or income earned in cash but then deposited into a bank) and then spent either via a card swipe at a POS terminal or withdrawal from an ATM and then spent in cash; and
b) a segment that earns and spends in cash (hence not part of formal banking channels).

We only look at the first point here, where individuals could pay digitally rather than withdrawing cash from an ATM.