MTS ties up with Vodaphone for data services

Mobile service operator Vodafone has launched USB internet dongles under a new service line, NetCruise which essentially offers internet access through CDMA operator MTS‘ EVDO network. This was first reported by Telecom Talk, which also mentioned that the service is being run as a pilot in the selected cities of Pune (Maharastra), Mysore (Karnataka), Jaipur (Rajasthan) and Coimbatore (Tamilnadu). The NetCruise website also mentions the same in fine print : ” Vodafone Mobile’ branded services are being offered by MTS through a brand franchise with Mobile Commerce Solutions Limited (MCSL). MCSL will provide MTS with designing, marketing and servicing of ‘Vodafone Mobile’ branded products being powered by MTS.”
Similar to MTS’ MBlaze, the service offers prepaid and postpaid data plans with speeds of upto 3.2 Mbps. It also free browsing on Yahoo and Wikipedia websites.
Paying a Premium just for a Brand?
While the arrangement made by MTS is to leverage Vodafone’s premium brand equity, we fail to understand why the service is priced at a premium compared to MTS’ own data plans on the same network. For example, the Unlimited 799 plan on NetCruise has a fair usage policy cap of 3.5GB, after which speeds are throttled to 144 Kbps or 64 Kbps from upto 3.2 Mbps. MTS’ MBlaze offers a similar plan with a monthly rental of Rs 750 and the usage cap is 5GB. Clearly, the NetCruise service is charging a premium for the Vodafone branding.

This is not the first time that such tie-ups have been inked. A similar partnership, close on the lines of an MVNO (Mobile Virtual Network Operators), was established between Tata Teleservices and Virgin, to brand, market and support a separate service on the same network under the Virgin brand name, targeted at the youth.
Also, Future Group and Tata Teleservices run a GSM service under the brand name T24 Mobile in Karnataka, Gujarat, West Bengal, Jharkhand, Chhatisgarh, Orissa, Punjab, Haryana, Rajasthan, Uttar Pradesh, Tamil Nadu, Kerala, Madhya Pradesh, Mumbai and Maharashtra,which offers rewards to customers who shop at Future Group’s retail stores.
However, this tie-up doesn’t offer any value addition to the service except for the premium branding. Also, wouldn’t it confuse Vodafone’s existing and potential customers, since the service runs on a completely different technology standard, and might even affect the sale of its own 3G WCDMA/HSDPA based dongles? This is probably one reason why Vodafone does not even make a mention of the service on its own website.

MTS to decide on IPO after the introduction of NTP

Sistema Shyam TeleServices Ltd (SSTL), which operates its telecom services under the MTS brand in India, today said it would decide on the ways and means to raise funds, including the IPO, after the introduction of the new telecom policy.
"We are waiting for the the telecom policy to come before we can decide on our fund raising plans including IPO," SSTL President and CEO Vsevolod Rozanov said here today on the sidelines of celebration for MTS crossing two million customer base in West Bengal.
The new National Telecom Policy (NTP) is likely to come in October and the company expects it will provide a clear direction for its long term planning.
He further said the company is looking at ways other than IPO as well, to raise money for investments next year.
"There are various options before us and IPO is one of them. We are working towards it like having adequate independent directors, scaling up operations. However, work and investment will not stop if IPO does not come soon as there are alternate means of financing," Rozanov said.
The investment for 2011, was funded by capital raised from 17.14% stake sold to the Russian Federation.
Rozanov did not elaborated on investment plan for 2012, however he said the company is working to introduce Version B of CDMA technology for faster data movement by modems.
"By September (Q3) we will launch this new technology for trial in Rajasthan," he said.
This technology is nothing but EVDO-B which can offer faster speed to the users as compared to GSM 3G. MTS garners 28% of its revenue from non-voice, of which about 20% comes from data services.

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