NTT DoCoMo- A world leader has arrived in India:

Last week saw the world leader of technology entering Indian telecom space. NTT DoCoMo Inc, a Japanese telecom giant joined hands with Tata Teleservices Ltd (TTSL). and has been given the license to launch GSM services in 19 of the 22 circles.

This will provide expertise to TTSL in the GSM Segment which will herald a new beginning for India. A true world leader in 3G technology has indeed arrived in India and this is sure to give sleepless nights to some of the executives at other telecom companies in India.

The 3G strength of DoCoMo which is readying itself for 4G in their Home country will help TTSL in its GSM endeavour and give a Philip to its under performing CDMA segment. With the spectrum allocation for 3G more than 3 months away due to the matter being transferred to the empowered group of ministers (eGoM), the time delay is inevitable. The formalities itself will take up this time. Then you have the base auction price to be decided and the allocation of how much spectrum to whom. Spectrum is a national asset and can be used only once. Thus arriving at the right valuation is most necessary and critical for Indian treasury.

When the spectrum is finally allotted, TTSL will surely get a head start over other telecom service providers in terms of technology, content and speed which are most essential for delivery of good Value-Added Services. It can also help in terms of promotional campaign to take on Vodafone which is aggressively pursuing the VAS segment. People would believe the promotion since they appreciate and are in awe of the technology expertise of Japanese companies.

The recession in the last10-22 months has not affected the growth of the telecom sector. The prime reason being the vast potential present. Only the metros and some major towns are congested with majority of players operating and virtually all people having a cell phone. The tier II cities and towns and rural areas are yet to be penetrated intensively. Thus the telecom sector has continued to grow with Bharti Airtel leading the pack with 100 million cutovers touched last month.

The entry of DoCoMo isn’t at all surprising. More players will enter India as the foreign direct investment (FDI) restrictions are relaxed in due course of time. There is talk of Etisalat (UAE giant), and AT&T (the US giant) entering India soon. Even Indian business houses are applying for spectrum to jump on this bandwagon such as DLF, Videocon, Shyam telecom, and some yet to be announced names.

With the increase in players vying for the same pie, naturally the competition would increase resulting in price wars. This augurs well for the Indian customer.