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BL Research Bureau

Bharti may be one of the first movers in making 3G services available to Indian subscribers with the planned launch of iPhone 3G version later this month. The key benefit to Bharti, if this launch clicks, would be possible upgradation of its existing users to this product, creating better potential for value-added service revenues.

The packaging of the hugely popular iPhone with 3G services may also help Bharti make quick inroads into the market for 3G services.

However, the revenue potential for this product would depend largely on its pricing and the willingness of post-paid subscribers (currently a small portion of the mobile market) to opt for this. For the industry, the arrangement would be a sort of pilot on what the offtake for 3G services is likely to be once such services are launched next year.

The iPhone 3G, has versions that start from $199 in the US for a memory capacity of 8GB and combines the features of iPod, mobile-phone and Internet packed into a single phone. The pricing in India is still unknown. It needs to be noted that Bharti may not be the only franchisee for iPhone in India, media reports suggest that Vodafone may also be shortly launching services through iPhone.

For Bharti, it needs to be seen if the iPhone will cannibalise on high-end phones such as BlackBerry, also offered by it. Second, as the arrangement to sell the iPhone is likely to be on a revenue-sharing model, profit margins on this may have to be shared too. Bharti now generates 9.7 per cent of its revenues from non-voice services, and a bulk of it is SMS and ringtone downloads. It will probably look to improving this proportion, depending on the offtake and pricing adopted for the product.

The iPhone may enable faster data transfers on applications such as Internet downloads and video applications. Bharti has an EDGE (evolution data rates for GSM evolution) network that will be able to support this iPhone technology. If and when Bharti wins 3G spectrum, operations in the efficient 2.1GHz band can commence and a greater bouquet of services could be offered.

More Stories on : Stocks | Telecommunications | Bharti Tele-Ventures Ltd

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