What Causes High Oil Prices?:
Like most of the things you buy, oil prices are affected by supply and demand. However, oil prices are also affected by oil price futures, which are traded on the commodities futures exchange. These prices fluctuate daily, depending on what investors think the price of oil will be in the future.
What Affects Oil Supply?:
OPEC is an organization of oil-producing countries that control most of the world's oil. In 1960, they formed an alliance to regulate the supply, and to some extent, the price of oil.
These countries realize that they have a non-renewable resource, and if they competed with each other, the price of oil would be so low that they would run out sooner than if oil prices were higher.
OPEC's goal is to keep the price of oil at around $70 per barrel. If it is much higher, than other countries would have the incentive to drill new fields which are too expensive to open when prices are low.
The U.S. stores 700 million barrels of oil in the Strategic Petroleum Reserves. This can be used to increase supply when necessary, such as after Hurricane Katrina. It is also used to ward off the possibility of political threats from oil-producing nations.
What Affects Oil Demand?:
The U.S. uses 20% of the world's oil. Two-thirds of this is for transportation. This is a result of the country's vast network of Federal highways leading to suburbs built in the 1950's. This decentralization was in response to the threat of nuclear attack, which was a great concern in the 1950's. Unfortunately, the consequence is that the country has not developed the infrastructure for mass transit, and is dependent upon imported oil.
The EU is the next biggest user, also at 25%. China only uses 10%, but its use has grown rapidly. (Source: BP Statistical Review of World Energy, CIA World Factbook)
What Affects Oil Price Futures?:
Oil futures, or futures contracts, are an agreement to buy or sell oil at a specific date in the future at a specific price. Traders in oil futures bid on the price of oil based on what they think oil will trade at. They look at projected supply and demand to determine the price. However, if traders think the price of oil will be high, they will actually create a self-fulfilling prophecy by bidding up oil prices. This can create high oil prices even when there is plenty of supply on hand. Once this starts, then other investors will bid on oil prices just like any other commodity, such as gold, and create a bubble.
How Do Oil Prices Affect Gasoline Prices?:
Crude oil accounts for 55% of the price of gasoline, while distribution and taxes influence the remaining 45%. Usually, distribution and taxes are stable, so that the daily change in the price of gasoline accurately reflects oil price fluctuations. Occasionally, however, distribution lines are disrupted or are down for maintenance, which can increase the price of gasoline even when oil prices are down.
Tuesday, November 18, 2008
The fall of Financial Giants
(Lehman bros story)
The biggest financial pandemic since the Great Depression roared through the USA and many parts of the world. Lehman Brothers and Merrill Lynch, the storied symbols of American money might no longer exist as they existed some days ago. Lehman Brothers, the 158-year old investment bank has filed for bankruptcy; Merrill Lynch, the premier brokerage and Wall Street’s third largest bank has agreed to be subsumed into Bank of America. Merrill worth $100 billion last year will sell itself for $50billion to Bank Am. To top it all, American International group (AIG) has asked the Fed to for an emergency loan of $40billion.If the appeal is turned down then AIG may have a few days for its survival.
Lehman Bros- How could such a big player like it fall?
Financial markets can be cruel and punishing at times. More so, if an institution is overleveraged-when loan and investment books are much , much bigger than its capital. What compounds the problem are strange accounting practice and high risk nature of loans and investments. There are also disclosure issues- Lehman, in its last conference with the investors did not give any clue that it was on the brink.
The Crisis build-up
An investment bank uses its proprietary book (own money) to lend others and invest. It started with the subprime crisis. Banks like Lehman, buy mortgage loans from other banks and then package them to sell bonds against the loan pool. Often they add cash to make the loan pool more attractive, so that the bonds can be sold at a higher price. Suppose mortgage was earning 6% and these bonds were sold at 4%. The difference is the spread which the investment bank earns. By selling these structured bonds, it raises money and frees capital. But when the homebuyers started defaulting , these bonds started losing value. It began all like this and spread like a virus across all markets. But according to the layman investment banks play only an advisory role. They do it, they also organize big loans for their clients for funding acquisitions. At times, they take up positions only to palm off securities to other clients and banks. In a crisis, they may not get the opportunity to down sell such positions . This adds to the panic.
How does this domino effect play out?
Suppose Lehman has to pay a bank from which it has borrowed. If it sells the mortgage-backed loans whose prices have fallen, it will not raise that much money as was earlier expected. So, it sells some of the other good assets or bonds which may have nothing to do with mortgages. But since the bank has started to dump these assets , prices of these bonds also dip. This is when the crisis spreads from subprime to prime.
Now, its effect on the balance sheet is attributed to the strange accounting of bonds and derivatives like mortgage-backed securities. All banks are required to mark to-market (MTM) their investments. So, if the price of an instrument falls, the difference between the prices it was bought and the current market price has to be provided-meaning, it has to be deducted from the earnings. So, a drop in the prices leads to a drop in MTM. But there’s a big problem which has really deepened the crisis. An MTM loss can be provided only if there’s a “MARKET”. The reason being that its very different from checking the price of a stock from the stock exchange website.
Many of the instruments are over-the counter derivatives, which are stuck over stuck on a one-to-one basis between the two parties. Suppose, a derivative is linked to variables like the yen-dollar rate , and may be prices of other activity traded assets, say gold price and US Treasury bills. What the bank does is construct a model, feeds the available market price of these variables to the computer to arrive at what the derivatives price could or should be. This is called mark-to-model.
The trouble is when the bank actually goes out to sell the derivatives; it discovers that there are no takers. Even if there are buyers they are willing to play only a fraction. In other words, there is a sea of difference between the price that is offered in the market and the high artificially generated price thrown up by the model. So, when the bank ends up selling the instrument or unwinding derivatives, the loss suffered is far in excess of the mark-to-model loss. Such extra losses on thousand of securities and multiple portfolios can wipe out the capital of the bank.
Nature of instruments-
There are collateralized debt obligations (CDOs), credit default swaps (CDSs) and all kinds of derivatives. CDOs are asset (or loan)-backed securities, while CDSs are like a guarantee. Say Bank A lends to a corporate but is unwilling to take the full credit risk. So, Bank A enters into a CDS deal with Bank B; under this , Bank B promises to pay Bank A if the corporate defaults. The money that Bank B earns for this is the CDS premium, which is similar to insurance premium. Now, if the markets turn choppy, risks go up and so does the CDS premium. So, bank B which is earning a lower premium has to promote a mark-to market loss against the CDS position.
So, what is the solution?
No easy answer to that. Maybe, some of the accounting norms need to be changed, so that the definition of MTM gets narrowed down. Besides, to stop banks from going overboard, capital requirement may have to be raised for derivatives position. But all this may be easier said than done.
The Lehman Story in a Nutshell-
Lehman’s slow collapse began as the mortgage market crisis unfolded during the summer of 2007. Its stock began a steady fall from a peak of $82 a share. The fears were based on the fact that the firm was a major player in the market for sub prime and prime mortgages. Lehman managed to avoid the fate of Bear Stearns, which was bought by JP Morgan Chase at a bargain basement price under the threat of bankruptcy. Lehman & Bear Stearns had some similarities. Both had relatively small balance sheets, they were heavily dependent on the mortgage market and they relied heavily on the repo market or the repurchase market most often used as a short term financing tool.
On June 9, 2008 Lehman announced a second quarter loss of $2.8 billion, far higher than analysts predicted. The situation became worse after the government announced on September 8 a take over of Fannie Mae and Freddie Mac. Lehman’s stock plunged as the markets wondered whether the move to save those mortgage giants made it less likely that Lehman might be bailed out. Treasury secretary Henry M. PaulsonJr. And Fed officials did encourage other financial institutions to buy Lehman, but by the end of the weekend, two main suitors Barclay’s and Bank of American, had both said no. Lehman had reached the end of line.
Effects of Lehman’s fall:
The move by Lehman Brothers Holdings, the fourth largest investment bank to file for bankruptcy in the US, will impact partly the country’s largest private bank-ICICI Bank. It will have to take a hit of $28 million on account of the additional provisioning that ICICI Bank’s UK subsidiary will have to make. During this quarter, it pared its Credit default swaps (CDS) exposures to overseas corporates from $65 million to $80 million. Some of the larger state owned banks are also likely to take small hits because of marked-to-market provisioning on their overseas investments.
Regulators in various markets are trying to ring fence their institutions from Lehman. RBI has barred Lehman Indian arm from remitting money to the parent, while Japan’s Financial Services agency has ordered Lehman to retain sufficient assets in Japan to cover its liabilities in the country.
Lehman Bros. won federal court approval to sell its North American business to Barclays Plc for $1.75 billion.
The Bush administration is asking the Congress to let the government buy$700 billion in toxic mortgages in the largest financial bailout since the Great Depression. (updated till 21.09.08)
The biggest financial pandemic since the Great Depression roared through the USA and many parts of the world. Lehman Brothers and Merrill Lynch, the storied symbols of American money might no longer exist as they existed some days ago. Lehman Brothers, the 158-year old investment bank has filed for bankruptcy; Merrill Lynch, the premier brokerage and Wall Street’s third largest bank has agreed to be subsumed into Bank of America. Merrill worth $100 billion last year will sell itself for $50billion to Bank Am. To top it all, American International group (AIG) has asked the Fed to for an emergency loan of $40billion.If the appeal is turned down then AIG may have a few days for its survival.
Lehman Bros- How could such a big player like it fall?
Financial markets can be cruel and punishing at times. More so, if an institution is overleveraged-when loan and investment books are much , much bigger than its capital. What compounds the problem are strange accounting practice and high risk nature of loans and investments. There are also disclosure issues- Lehman, in its last conference with the investors did not give any clue that it was on the brink.
The Crisis build-up
An investment bank uses its proprietary book (own money) to lend others and invest. It started with the subprime crisis. Banks like Lehman, buy mortgage loans from other banks and then package them to sell bonds against the loan pool. Often they add cash to make the loan pool more attractive, so that the bonds can be sold at a higher price. Suppose mortgage was earning 6% and these bonds were sold at 4%. The difference is the spread which the investment bank earns. By selling these structured bonds, it raises money and frees capital. But when the homebuyers started defaulting , these bonds started losing value. It began all like this and spread like a virus across all markets. But according to the layman investment banks play only an advisory role. They do it, they also organize big loans for their clients for funding acquisitions. At times, they take up positions only to palm off securities to other clients and banks. In a crisis, they may not get the opportunity to down sell such positions . This adds to the panic.
How does this domino effect play out?
Suppose Lehman has to pay a bank from which it has borrowed. If it sells the mortgage-backed loans whose prices have fallen, it will not raise that much money as was earlier expected. So, it sells some of the other good assets or bonds which may have nothing to do with mortgages. But since the bank has started to dump these assets , prices of these bonds also dip. This is when the crisis spreads from subprime to prime.
Now, its effect on the balance sheet is attributed to the strange accounting of bonds and derivatives like mortgage-backed securities. All banks are required to mark to-market (MTM) their investments. So, if the price of an instrument falls, the difference between the prices it was bought and the current market price has to be provided-meaning, it has to be deducted from the earnings. So, a drop in the prices leads to a drop in MTM. But there’s a big problem which has really deepened the crisis. An MTM loss can be provided only if there’s a “MARKET”. The reason being that its very different from checking the price of a stock from the stock exchange website.
Many of the instruments are over-the counter derivatives, which are stuck over stuck on a one-to-one basis between the two parties. Suppose, a derivative is linked to variables like the yen-dollar rate , and may be prices of other activity traded assets, say gold price and US Treasury bills. What the bank does is construct a model, feeds the available market price of these variables to the computer to arrive at what the derivatives price could or should be. This is called mark-to-model.
The trouble is when the bank actually goes out to sell the derivatives; it discovers that there are no takers. Even if there are buyers they are willing to play only a fraction. In other words, there is a sea of difference between the price that is offered in the market and the high artificially generated price thrown up by the model. So, when the bank ends up selling the instrument or unwinding derivatives, the loss suffered is far in excess of the mark-to-model loss. Such extra losses on thousand of securities and multiple portfolios can wipe out the capital of the bank.
Nature of instruments-
There are collateralized debt obligations (CDOs), credit default swaps (CDSs) and all kinds of derivatives. CDOs are asset (or loan)-backed securities, while CDSs are like a guarantee. Say Bank A lends to a corporate but is unwilling to take the full credit risk. So, Bank A enters into a CDS deal with Bank B; under this , Bank B promises to pay Bank A if the corporate defaults. The money that Bank B earns for this is the CDS premium, which is similar to insurance premium. Now, if the markets turn choppy, risks go up and so does the CDS premium. So, bank B which is earning a lower premium has to promote a mark-to market loss against the CDS position.
So, what is the solution?
No easy answer to that. Maybe, some of the accounting norms need to be changed, so that the definition of MTM gets narrowed down. Besides, to stop banks from going overboard, capital requirement may have to be raised for derivatives position. But all this may be easier said than done.
The Lehman Story in a Nutshell-
Lehman’s slow collapse began as the mortgage market crisis unfolded during the summer of 2007. Its stock began a steady fall from a peak of $82 a share. The fears were based on the fact that the firm was a major player in the market for sub prime and prime mortgages. Lehman managed to avoid the fate of Bear Stearns, which was bought by JP Morgan Chase at a bargain basement price under the threat of bankruptcy. Lehman & Bear Stearns had some similarities. Both had relatively small balance sheets, they were heavily dependent on the mortgage market and they relied heavily on the repo market or the repurchase market most often used as a short term financing tool.
On June 9, 2008 Lehman announced a second quarter loss of $2.8 billion, far higher than analysts predicted. The situation became worse after the government announced on September 8 a take over of Fannie Mae and Freddie Mac. Lehman’s stock plunged as the markets wondered whether the move to save those mortgage giants made it less likely that Lehman might be bailed out. Treasury secretary Henry M. PaulsonJr. And Fed officials did encourage other financial institutions to buy Lehman, but by the end of the weekend, two main suitors Barclay’s and Bank of American, had both said no. Lehman had reached the end of line.
Effects of Lehman’s fall:
The move by Lehman Brothers Holdings, the fourth largest investment bank to file for bankruptcy in the US, will impact partly the country’s largest private bank-ICICI Bank. It will have to take a hit of $28 million on account of the additional provisioning that ICICI Bank’s UK subsidiary will have to make. During this quarter, it pared its Credit default swaps (CDS) exposures to overseas corporates from $65 million to $80 million. Some of the larger state owned banks are also likely to take small hits because of marked-to-market provisioning on their overseas investments.
Regulators in various markets are trying to ring fence their institutions from Lehman. RBI has barred Lehman Indian arm from remitting money to the parent, while Japan’s Financial Services agency has ordered Lehman to retain sufficient assets in Japan to cover its liabilities in the country.
Lehman Bros. won federal court approval to sell its North American business to Barclays Plc for $1.75 billion.
The Bush administration is asking the Congress to let the government buy$700 billion in toxic mortgages in the largest financial bailout since the Great Depression. (updated till 21.09.08)
OLYMPICS: A GLOBAL PLATFORM FOR PRODUCT INNOVATION & MARKETING
Olympic viewing in India is surely gaining momentum. While Chinese Dragons put in their heart and soul for the three-and-a-half-hour opening gala at Beijing, back home, almost 27-million viewers watched the event, over three times more than the number of viewers for the opening ceremony of Athens 2004 (8.6-million viewers). The television rating figures for the opening ceremony also point out that even though the viewership is still predominantly male (62%), Olympics is gaining traction with women viewers too (38%).
Make no mistake, this has been the most talked-about Olympic Games. And it will be talked about long after it is over. Also, during the fortnight, it will be the biggest marketplace as well as a dream networking platform. From the moment Juan Antonio Samaranch, the then International Olympic President, confirmed Beijing’s successful bid for the 2008 Olympics, international sport, politics and business began preparing for it. Controversies and awe have walked side by side as the world kept a tab on the way the Chinese went about organising the Games.
Top corporates have invited thousands of guests, all high-powered and wishing to mingle with their ilk, not just from the world of sport, but also politics and business. The fact that the venue is China makes this meeting of the high-and-mighty all the more interesting, for the Games offer a unique opportunity for international leaders to grab a slice of China’s emerging domestic market. Beijing will have, among its visitors and guests, personalities like News Corporation supremo Rupert Murdoch, Wal-Mart CEO H Lee Scott Jr, Motorola CEO Greg Brown. Who’s who from companies like McDonalds, Volkswagen and General Electric will also be present . There is buzz that some of these men may even get a meeting with the Chinese President Hu Jintao.
Nike is working with athletes of more than 100 countries and have such high-profile athletes like US basketball players LeBron James and Kobe Bryant and China track and field star Liu Xiang. Nike is also said to have sold more than a billion dollars worth of goods in China during its last financial year and is making products in as many as 28 Olympic sports and provides goods to more than 20 Chinese companies.
Similarly GE have launched LOGIQi a compact Ultrasonic Machine,a 12 pound machine which can create detailed images of the tiniest of tears in ligaments of an athlete.
French Chinese tech company ASK-Tong Fang have introduced a new concept of microchip in Olympics tickets for opening ceremony.It holds all the necessary personal data of spectators along with their photographs.
Powerbar a Nestle subsidiary introduced a new VITAMIN enriched foods for athletes and cyclist.
Watchmaker OMEGA introduced new time recording methodologies with precision as small as 1/1000 secs.
Speedo introduced a full body swimsuit which assist swimmers to move through water faster and many more…………..
China is believed to have spent anything between $35 bn and $43 bn on the Olympic Games, sometimes referred to as “Beijing’s Coming Out” party. No matter which of these two figures is closer to the real expenditure, the fact of the matter is, it far exceeds whatever previous hosts may have incurred. But if one were to go by some serious analysts’ beliefs, China could land an extra gold medal sometime six months after the Games’ flame has been extinguished. Its clearly evident that Olympics are an unparalled marketing platform and companies sees innovation to grab people’s attention.
Make no mistake, this has been the most talked-about Olympic Games. And it will be talked about long after it is over. Also, during the fortnight, it will be the biggest marketplace as well as a dream networking platform. From the moment Juan Antonio Samaranch, the then International Olympic President, confirmed Beijing’s successful bid for the 2008 Olympics, international sport, politics and business began preparing for it. Controversies and awe have walked side by side as the world kept a tab on the way the Chinese went about organising the Games.
Top corporates have invited thousands of guests, all high-powered and wishing to mingle with their ilk, not just from the world of sport, but also politics and business. The fact that the venue is China makes this meeting of the high-and-mighty all the more interesting, for the Games offer a unique opportunity for international leaders to grab a slice of China’s emerging domestic market. Beijing will have, among its visitors and guests, personalities like News Corporation supremo Rupert Murdoch, Wal-Mart CEO H Lee Scott Jr, Motorola CEO Greg Brown. Who’s who from companies like McDonalds, Volkswagen and General Electric will also be present . There is buzz that some of these men may even get a meeting with the Chinese President Hu Jintao.
Nike is working with athletes of more than 100 countries and have such high-profile athletes like US basketball players LeBron James and Kobe Bryant and China track and field star Liu Xiang. Nike is also said to have sold more than a billion dollars worth of goods in China during its last financial year and is making products in as many as 28 Olympic sports and provides goods to more than 20 Chinese companies.
Similarly GE have launched LOGIQi a compact Ultrasonic Machine,a 12 pound machine which can create detailed images of the tiniest of tears in ligaments of an athlete.
French Chinese tech company ASK-Tong Fang have introduced a new concept of microchip in Olympics tickets for opening ceremony.It holds all the necessary personal data of spectators along with their photographs.
Powerbar a Nestle subsidiary introduced a new VITAMIN enriched foods for athletes and cyclist.
Watchmaker OMEGA introduced new time recording methodologies with precision as small as 1/1000 secs.
Speedo introduced a full body swimsuit which assist swimmers to move through water faster and many more…………..
China is believed to have spent anything between $35 bn and $43 bn on the Olympic Games, sometimes referred to as “Beijing’s Coming Out” party. No matter which of these two figures is closer to the real expenditure, the fact of the matter is, it far exceeds whatever previous hosts may have incurred. But if one were to go by some serious analysts’ beliefs, China could land an extra gold medal sometime six months after the Games’ flame has been extinguished. Its clearly evident that Olympics are an unparalled marketing platform and companies sees innovation to grab people’s attention.
3G mobile communications systems in India
3G mobile communications systems, due to succeed to the Present 2G such as the GSM, will be able to provide users with a large range of high throughput capacity multimedia Services and applications. These new possibilities will be founded upon three main innovations: founded upon three main innovations:
• Broadband radio-frequency access allowing rates up
to 2 Mbit/s;
• Intelligent network (IN) architecture allowing to
create a single access mode to the services for the
user whatever the network he uses, and to provide
numerous supplementary services;
• Convergence between fixed and mobile networks
(FMC) is in progress.
Considering the multimedia nature of the services envisaged, it is to be expected that alliances will be set up between the actors of several industries: telecommunications,
computer and audio-visual industries [2]. For developing a new mobile service based on 3G a huge investment is required. Therefore, it is necessary to have a
market study and understand what costumers need.
India will soon join the elite club of countries that have 3G mobile services with Mahanagar Telephone Nigam (MTNL) setting up India’s first 3G networks in Delhi and Mumbai. The network will have a capacity of 4m lines and will be operational next year. First, the basics. The total investment in the project will be to the tune of Rs 4,000 crore. The company has already started discussions with equipment suppliers.
On August 1, 2008, India joined the elite list of countries to announce a policy for third generation mobile service that will enable customers to enjoy voice, video, data and downloading facilities on theirThe much-awaited 3G policy would allow up to 10 players in a service area including foreign companies. India has 60 MHz of 3G spectrum available. The auction will take place in the 2.1 GHz band. The government has set a base price of Rs 2,020 crore (Rs 20.20 billion) for each bid for a pan-India license. Initially, there will be three to five operators to sell the 3G services, including state-run BSNL and MTNL. The state-run telecom firms have an edge to start the 3G services earlier than others as they do not have to bid for the spectrum as they only have to match the highest bid in their respective circles.
There is no firm date set for the auction of 3G spectrum, but it is likely to take place before February 2009 since the government may need the money to keep its deficit within control; current estimates put the initial entry fee bids that the government will get at anywhere between Rs 30,000 crore (Rs 300 billion) and Rs 40,000 crore (Rs 400 billion). In that case, by about December 2009, India may get broadband-type internet speeds on mobile phones. That, in turn, will allow users to view movies on their mobile phones, conduct video telephony while on the move, and so on. How do 3G services help us? 3G services enable video broadcast and data-intensive services such as stock transactions, e-learning and telemedicine through wireless communications All telecom operators are waiting to launch 3G in India to cash in on revenues by providing high-end services to customers, which are voice data and video enabled. India lags behind many Asian countries in introducing 3G services. Packet-based data provides several advantages over the existing circuit-switched techniques used for carrying mobile voice. It allows higher call volumes and support for multimedia data applications, such as video and photography. Users will be charged on how much data they transmit, not on how much time they are connected to the network, because with 3G you are constantly online and only pay for the information you receive
Cheaper, and better, phones With 3G mobile services, which provide high-speed downloads of data, movies and videos, around six month away, mobile phone makers are getting ready to offer handsets for as little as Rs 3,500, against the currently available minimum price of over Rs 8,000. Chinese telecom giant Huawei Technologies is already in talks with leading Indian operators of GSM mobile services to sell a 3G entry-level phone within $80 to $100. South Korean electronics giant LG Electronics has the KU250 3G phone model, which is positioned as one of the cheapest phones in this category around the globe. "We will launch an adaptation of this model in India for around $100. Motorola India also expects prices to fall dramatically. It expects the prices of phones to come down to Rs 4,000-5,000. Motorola has about three 3G models that range from Rs 14,000 to Rs 19,000. Also, contrary to common belief, 3G will not be a premium service. Operators said a start-up package could cost around Rs 299, which is roughly what consumers pay for a fixed broadband service. Unlimited downloading may require subscribers to pay Rs 500 to Rs 1,000 a month.How is 3G different from 2G and 4G? While 2G stands for second-generation wireless telephone technology, 1G networks used are analog, 2G networks are digital and 3G (third-generation) technology is used to enhance mobile phone standards. While 2G is focused on voice, 3G supports high-speed data of at least 144 kbps enabling broadband Internet access on the mobile, and 'triple play' features like mobile TV and converged communication services. 3G helps to simultaneously transfer both voice data (a telephone call) and non-voice data (such as downloading information, exchanging e-mail, and instant messaging. The highlight of 3G is video telephony. 4G technology stands to be the future standard of wireless devices. Currently, Japanese company NTT DoCoMo and Samsung are testing 4G communication. What are the issues regarding 3G for providers and users? 3G has successfully been introduced in Europe. But several issues continue to hamper its growth. High spectrum licensing fees for the 3G services. Huge capital required to build infrastructure for 3G services. Health impact of electromagnetic waves. Prices are very high for 3G mobile services. Will 2G users switch to 3G services? Takes time to catch up as the service is new. In how many countries does 3G exist? There are about 60 3G networks across 25 countries. In Asia, Europe and the United States, telecom firms use Wideband Code Division Multiple Access (WCDMA) technology. The WCDMA standard provides seamless global evolution from today's GSM with support of the worlds' largest mobile operators. WCDMA technology is built on open standards, wide ranging mobile multimedia possibility, and vast potential economies of scale with the support of around 100 terminal designs to operate 3G mobile networks. 3G services were introduced in Europe in 2003. In which country was 3G spectrum first introduced? Japan was the first country to introduce 3G on a large commercial scale. In 2005, about 40 per cent of subscribers used only 3G networks. It is expected that during 2006 the subscribers would move from 2G to 3G and upgrade to the next 3.5 G level. The success of 3G in Japan also shows that video telephony was the killer application for 3G networks. Downloading music was the biggest draw in 3G services. India, which has 287 million wireless subscribers, saw its mobile user base grow 25 times in the last five years making it the second largest wireless market in the world after China.
For the geeks, here’s what the tech-tonic shift is all about: 3G services allow high-speed mobile broadband access at a speed of more than 386 kbps. This will be a techie’s dream come true. 3G technology enables you to work out of your mobile instrument. It becomes your work station with high-speed bandwidth enabling video downloads and other critical functions. Mobile subscribers in India will soon have access to wireless applications and the internet at broadband speeds with the latest 3G CDMA devices. 3G services have already become popular in Japan, UK, Hong Kong, Australia, Sweden and Denmark. NTT DoCoMo has a subscriber base of more than 3.5m in Japan. Swedish mobile service provider ‘3’ has a subscriber base of 350,000 in Sweden and Denmark, adding around 150,000 customers since mid-August. In UK, Hutchison is the 3G service provider. 3G services enable high data applications. Therefore, the average revenue per user from 3G subscribers is more than that of ordinary mobile subscribers. Internationally, revenues from 3G services is about 60% higher than that of ordinary mobile services.
• Broadband radio-frequency access allowing rates up
to 2 Mbit/s;
• Intelligent network (IN) architecture allowing to
create a single access mode to the services for the
user whatever the network he uses, and to provide
numerous supplementary services;
• Convergence between fixed and mobile networks
(FMC) is in progress.
Considering the multimedia nature of the services envisaged, it is to be expected that alliances will be set up between the actors of several industries: telecommunications,
computer and audio-visual industries [2]. For developing a new mobile service based on 3G a huge investment is required. Therefore, it is necessary to have a
market study and understand what costumers need.
India will soon join the elite club of countries that have 3G mobile services with Mahanagar Telephone Nigam (MTNL) setting up India’s first 3G networks in Delhi and Mumbai. The network will have a capacity of 4m lines and will be operational next year. First, the basics. The total investment in the project will be to the tune of Rs 4,000 crore. The company has already started discussions with equipment suppliers.
On August 1, 2008, India joined the elite list of countries to announce a policy for third generation mobile service that will enable customers to enjoy voice, video, data and downloading facilities on theirThe much-awaited 3G policy would allow up to 10 players in a service area including foreign companies. India has 60 MHz of 3G spectrum available. The auction will take place in the 2.1 GHz band. The government has set a base price of Rs 2,020 crore (Rs 20.20 billion) for each bid for a pan-India license. Initially, there will be three to five operators to sell the 3G services, including state-run BSNL and MTNL. The state-run telecom firms have an edge to start the 3G services earlier than others as they do not have to bid for the spectrum as they only have to match the highest bid in their respective circles.
There is no firm date set for the auction of 3G spectrum, but it is likely to take place before February 2009 since the government may need the money to keep its deficit within control; current estimates put the initial entry fee bids that the government will get at anywhere between Rs 30,000 crore (Rs 300 billion) and Rs 40,000 crore (Rs 400 billion). In that case, by about December 2009, India may get broadband-type internet speeds on mobile phones. That, in turn, will allow users to view movies on their mobile phones, conduct video telephony while on the move, and so on. How do 3G services help us? 3G services enable video broadcast and data-intensive services such as stock transactions, e-learning and telemedicine through wireless communications All telecom operators are waiting to launch 3G in India to cash in on revenues by providing high-end services to customers, which are voice data and video enabled. India lags behind many Asian countries in introducing 3G services. Packet-based data provides several advantages over the existing circuit-switched techniques used for carrying mobile voice. It allows higher call volumes and support for multimedia data applications, such as video and photography. Users will be charged on how much data they transmit, not on how much time they are connected to the network, because with 3G you are constantly online and only pay for the information you receive
Cheaper, and better, phones With 3G mobile services, which provide high-speed downloads of data, movies and videos, around six month away, mobile phone makers are getting ready to offer handsets for as little as Rs 3,500, against the currently available minimum price of over Rs 8,000. Chinese telecom giant Huawei Technologies is already in talks with leading Indian operators of GSM mobile services to sell a 3G entry-level phone within $80 to $100. South Korean electronics giant LG Electronics has the KU250 3G phone model, which is positioned as one of the cheapest phones in this category around the globe. "We will launch an adaptation of this model in India for around $100. Motorola India also expects prices to fall dramatically. It expects the prices of phones to come down to Rs 4,000-5,000. Motorola has about three 3G models that range from Rs 14,000 to Rs 19,000. Also, contrary to common belief, 3G will not be a premium service. Operators said a start-up package could cost around Rs 299, which is roughly what consumers pay for a fixed broadband service. Unlimited downloading may require subscribers to pay Rs 500 to Rs 1,000 a month.How is 3G different from 2G and 4G? While 2G stands for second-generation wireless telephone technology, 1G networks used are analog, 2G networks are digital and 3G (third-generation) technology is used to enhance mobile phone standards. While 2G is focused on voice, 3G supports high-speed data of at least 144 kbps enabling broadband Internet access on the mobile, and 'triple play' features like mobile TV and converged communication services. 3G helps to simultaneously transfer both voice data (a telephone call) and non-voice data (such as downloading information, exchanging e-mail, and instant messaging. The highlight of 3G is video telephony. 4G technology stands to be the future standard of wireless devices. Currently, Japanese company NTT DoCoMo and Samsung are testing 4G communication. What are the issues regarding 3G for providers and users? 3G has successfully been introduced in Europe. But several issues continue to hamper its growth. High spectrum licensing fees for the 3G services. Huge capital required to build infrastructure for 3G services. Health impact of electromagnetic waves. Prices are very high for 3G mobile services. Will 2G users switch to 3G services? Takes time to catch up as the service is new. In how many countries does 3G exist? There are about 60 3G networks across 25 countries. In Asia, Europe and the United States, telecom firms use Wideband Code Division Multiple Access (WCDMA) technology. The WCDMA standard provides seamless global evolution from today's GSM with support of the worlds' largest mobile operators. WCDMA technology is built on open standards, wide ranging mobile multimedia possibility, and vast potential economies of scale with the support of around 100 terminal designs to operate 3G mobile networks. 3G services were introduced in Europe in 2003. In which country was 3G spectrum first introduced? Japan was the first country to introduce 3G on a large commercial scale. In 2005, about 40 per cent of subscribers used only 3G networks. It is expected that during 2006 the subscribers would move from 2G to 3G and upgrade to the next 3.5 G level. The success of 3G in Japan also shows that video telephony was the killer application for 3G networks. Downloading music was the biggest draw in 3G services. India, which has 287 million wireless subscribers, saw its mobile user base grow 25 times in the last five years making it the second largest wireless market in the world after China.
For the geeks, here’s what the tech-tonic shift is all about: 3G services allow high-speed mobile broadband access at a speed of more than 386 kbps. This will be a techie’s dream come true. 3G technology enables you to work out of your mobile instrument. It becomes your work station with high-speed bandwidth enabling video downloads and other critical functions. Mobile subscribers in India will soon have access to wireless applications and the internet at broadband speeds with the latest 3G CDMA devices. 3G services have already become popular in Japan, UK, Hong Kong, Australia, Sweden and Denmark. NTT DoCoMo has a subscriber base of more than 3.5m in Japan. Swedish mobile service provider ‘3’ has a subscriber base of 350,000 in Sweden and Denmark, adding around 150,000 customers since mid-August. In UK, Hutchison is the 3G service provider. 3G services enable high data applications. Therefore, the average revenue per user from 3G subscribers is more than that of ordinary mobile subscribers. Internationally, revenues from 3G services is about 60% higher than that of ordinary mobile services.
CHINDIA Rising : A global threat or boon
The 20th century belonged to the advanced economies, but the 21st, economists believe, will be driven by the emerging ones. Among the large emerging economies such as Brazil, Russia, Nigeria and Indonesia, it is the rise of China and India (Chindia) which will have (and already has) enormous business implications during the first half of this Century mostly beneficial to the world.
Rise of Chindia : Global Relief and Benefits
First, both nations will require enormous natural resources because not only are they manufacturing and service centers of the world, but because of their own rapidly expanding domestic consumer markets. And this demand for natural and industrial resources such as oil, gas, coal, copper, bauxite, aluminum, iron and steel will be for many years. Since a vast majority of these untapped resources are in other dormant or emerging economies in Africa, Caribbean, Latin America, Central Asia and Russia, the rise of Chindia will create economic boom for them which otherwise did not happen for nearly 200 years of colonial rule.
Second, the global integration of China and India will be radically different. India's economy and enterprises will be globally integrated especially with other advanced countries (Europe, US, Canada, UK, Australia, Singapore, Japan, South Korea) through large scale acquisitions of well established and well respected foreign companies with technology, branding and manufacturing assets. The journey has already begun with Mittal Steel's acquisition of Arcelor, Tata Steel's acquisition of Corus Steel, and Hindalco's acquisition of Novelis (largest North American sheet aluminum company). And it will not be limited to industrial raw materials and to private enterprises of India. For example, several large public sector units (PSUs) of India such as ONGC (Oil and Natural Gas Corporation), Indian oil and SBI (State Bank of India), who have the domestic scale and capital reserve, are starting to fl ex their acquisition muscles. In other words, India will contribute to global growth as much, if not more, through revitalizing and investing in Western assets as it would through growth of its domestic consumer markets.
On the other hand, China's growth will be proportionately more domestic and only on a selective basis through global acquisitions. This is due to several reasons. First, China has begun to focus on domestic demand especially in consumer markets such as consumer electronics, appliances, automobiles and financial services. It has the physical infrastructure as well as large scale domestic state-owned enterprises such as Haier, Lenovo, China Mobil, Petro China and China Development Bank to capitalize on domestic demand.
Second, the advanced world seems less willing to sell their assets to China (especially technology assets) due to myopic misperceptions about the peaceful rise of China (in contrast to rise of India).
For example, Chinese oil company, CNOOC's attempt to buy Unocal as well as Haier's (the largest Chinese appliance company) attempt to buy Maytag Company in the US, met with political resistance. The obvious exception is IBM's sale of its personal computer (PC) business to Lenovo.
China v/s India : The Comparison
China has a 20-year lead time. Reforms in China started in 1976-78, whereas in India, they started in 1991 — what we call India’s Second Independence. Now, in China, the government runs like a corporation — a corporate state. India is a democracy — its policies are based on democratic viewpoints. The speed at which India makes its decisions is slower — it comes only after several rounds of debates. China doesn’t allow that, and thus things happen at a faster pace. For instance, infrastructure development in China has been much faster than in India.
But according to analysis Chinese economy will start plateauing by 2035, probably sooner. The main reason is that by then China will become very affluent, and its population will be ageing. Its growth will start slowing down, just as it happened in the case of Japan, Western Europe or even the US. Checking the population growth rate — the one-child policy that it put in place — is going to come in the way.
If we extrapolate, presuming things will work out, between now and 2035, India will be able to build infrastructure — which can help add 1.5 to 2 per cent additional GDP, with no inflation. Infrastructure investment has always been non-inflationary. By 2035, India will have good infrastructure, though it may not be world-class. Infrastructure means, financial and human capital infrastructure, which includes education and health of its people.
China will plateau, but by then it will become the number one economy in the world. The US will be number two and India will be number three or four, depending upon how the EU will function as an economy. India would be number three, but it does have the potential to become number one or two in the long term.If you take the economies of India and China as 100 per cent, China is 90 per cent and India is 10. But by 2035, India’s share will increase to about 40 per cent or even more. It’s not because India would do better, but primarily because China will lose its edge in terms of population growth. Another reason is that China will not remain self-sufficient in agriculture — it just does not have enough land mass that is irrigable. So China will always be a net importer of food and fuel. India is likely to remain self-sufficient in food because of its fertile land.
Threats from China
There are signs that Chindia especially China is allocating more priority to resources for its military than it has done in recent years. Currently it spends about half the amount the UK does on defence. Military pay may be considerably below that enjoyed by British troops, but the funds still have to be found for nearly 2.5 million soldiers, sailors and airmen: over ten times as many as the UK fields. The Chinese announced that their defence budget is to enjoy an 18% rise. At the same time the new US Administration is signalling that it will be reshaping its defence policy to focus on the emerging threat that China poses to the Asian region. All of this sounds like the opening rounds of a new Cold War with China taking the place of the Soviet Union. There seem to be wrong assessments both in Beijing and in Washington.
Conclusion
Let alone all the political concerns looming with China and US, the rise of Chindia is definitely an advantageous situation for the global scenario. Soon the largest trading bloc will be Asia especially with free trade with India. This will require formation of a new currency comparable to the Euro; and it will become the dominant currency of the world similar to the rise of the dollar as a global currency after World War I. While the global integration paths taken by China and India will be different, their impact on businesses worldwide either as suppliers, customers, partners or competitors will be beneficial and enormous. In fact, it is no exaggeration to state that the future survival of most admired enterprises from all advanced economies including the United States, Canada, Europe, Australia, Japan, and South Korea will depend on how quickly they participate in ensuring rise of China and India even if they have to distance from their own government's politics and public opinion.
Rise of Chindia : Global Relief and Benefits
First, both nations will require enormous natural resources because not only are they manufacturing and service centers of the world, but because of their own rapidly expanding domestic consumer markets. And this demand for natural and industrial resources such as oil, gas, coal, copper, bauxite, aluminum, iron and steel will be for many years. Since a vast majority of these untapped resources are in other dormant or emerging economies in Africa, Caribbean, Latin America, Central Asia and Russia, the rise of Chindia will create economic boom for them which otherwise did not happen for nearly 200 years of colonial rule.
Second, the global integration of China and India will be radically different. India's economy and enterprises will be globally integrated especially with other advanced countries (Europe, US, Canada, UK, Australia, Singapore, Japan, South Korea) through large scale acquisitions of well established and well respected foreign companies with technology, branding and manufacturing assets. The journey has already begun with Mittal Steel's acquisition of Arcelor, Tata Steel's acquisition of Corus Steel, and Hindalco's acquisition of Novelis (largest North American sheet aluminum company). And it will not be limited to industrial raw materials and to private enterprises of India. For example, several large public sector units (PSUs) of India such as ONGC (Oil and Natural Gas Corporation), Indian oil and SBI (State Bank of India), who have the domestic scale and capital reserve, are starting to fl ex their acquisition muscles. In other words, India will contribute to global growth as much, if not more, through revitalizing and investing in Western assets as it would through growth of its domestic consumer markets.
On the other hand, China's growth will be proportionately more domestic and only on a selective basis through global acquisitions. This is due to several reasons. First, China has begun to focus on domestic demand especially in consumer markets such as consumer electronics, appliances, automobiles and financial services. It has the physical infrastructure as well as large scale domestic state-owned enterprises such as Haier, Lenovo, China Mobil, Petro China and China Development Bank to capitalize on domestic demand.
Second, the advanced world seems less willing to sell their assets to China (especially technology assets) due to myopic misperceptions about the peaceful rise of China (in contrast to rise of India).
For example, Chinese oil company, CNOOC's attempt to buy Unocal as well as Haier's (the largest Chinese appliance company) attempt to buy Maytag Company in the US, met with political resistance. The obvious exception is IBM's sale of its personal computer (PC) business to Lenovo.
China v/s India : The Comparison
China has a 20-year lead time. Reforms in China started in 1976-78, whereas in India, they started in 1991 — what we call India’s Second Independence. Now, in China, the government runs like a corporation — a corporate state. India is a democracy — its policies are based on democratic viewpoints. The speed at which India makes its decisions is slower — it comes only after several rounds of debates. China doesn’t allow that, and thus things happen at a faster pace. For instance, infrastructure development in China has been much faster than in India.
But according to analysis Chinese economy will start plateauing by 2035, probably sooner. The main reason is that by then China will become very affluent, and its population will be ageing. Its growth will start slowing down, just as it happened in the case of Japan, Western Europe or even the US. Checking the population growth rate — the one-child policy that it put in place — is going to come in the way.
If we extrapolate, presuming things will work out, between now and 2035, India will be able to build infrastructure — which can help add 1.5 to 2 per cent additional GDP, with no inflation. Infrastructure investment has always been non-inflationary. By 2035, India will have good infrastructure, though it may not be world-class. Infrastructure means, financial and human capital infrastructure, which includes education and health of its people.
China will plateau, but by then it will become the number one economy in the world. The US will be number two and India will be number three or four, depending upon how the EU will function as an economy. India would be number three, but it does have the potential to become number one or two in the long term.If you take the economies of India and China as 100 per cent, China is 90 per cent and India is 10. But by 2035, India’s share will increase to about 40 per cent or even more. It’s not because India would do better, but primarily because China will lose its edge in terms of population growth. Another reason is that China will not remain self-sufficient in agriculture — it just does not have enough land mass that is irrigable. So China will always be a net importer of food and fuel. India is likely to remain self-sufficient in food because of its fertile land.
Threats from China
There are signs that Chindia especially China is allocating more priority to resources for its military than it has done in recent years. Currently it spends about half the amount the UK does on defence. Military pay may be considerably below that enjoyed by British troops, but the funds still have to be found for nearly 2.5 million soldiers, sailors and airmen: over ten times as many as the UK fields. The Chinese announced that their defence budget is to enjoy an 18% rise. At the same time the new US Administration is signalling that it will be reshaping its defence policy to focus on the emerging threat that China poses to the Asian region. All of this sounds like the opening rounds of a new Cold War with China taking the place of the Soviet Union. There seem to be wrong assessments both in Beijing and in Washington.
Conclusion
Let alone all the political concerns looming with China and US, the rise of Chindia is definitely an advantageous situation for the global scenario. Soon the largest trading bloc will be Asia especially with free trade with India. This will require formation of a new currency comparable to the Euro; and it will become the dominant currency of the world similar to the rise of the dollar as a global currency after World War I. While the global integration paths taken by China and India will be different, their impact on businesses worldwide either as suppliers, customers, partners or competitors will be beneficial and enormous. In fact, it is no exaggeration to state that the future survival of most admired enterprises from all advanced economies including the United States, Canada, Europe, Australia, Japan, and South Korea will depend on how quickly they participate in ensuring rise of China and India even if they have to distance from their own government's politics and public opinion.
DTH-the new battle ground for the Corporates
In 1962 Telstar satellite relayed a television signal over North America, sparking off the satellite television revolution.
India too experimented first with satellite television in the mid 1970s under the SITE programme and later in 1982 with the Doordarshan national network. The exponential growth of cable TV in India in the 1990s made us a part of the global satellite television revolution.Now the stage is set in India for the next generation of satellite TV -- Direct to Home broadcasting.Location and accessibility to the cable line no longer matters in a DTH scenario. That's because the programmes are beamed directly to the television at home.
Direct broadcast satellite (DBS) is a term used to refer to satellite television broadcasts intended for home reception, also referred to more broadly as direct-to-home signals. The expression direct-to-home or DTH was, initially, meant to distinguish the transmissions directly intended for home viewers from cable television distribution services that sometimes carried on the same satellite.
What happens when four biggies of the Indian business world (i.e., TATA group , Reliance ADAG group , Bharti group & the Essel Group) decide that each wants to rule the same segment? One, their pockets burn real deep. Two, customers rule.
In the Direct to Home (DTH) market, installation charges as low as Rs 1,400 and a dirt cheap monthly subscription cost — less than Rs 100 — are fast becoming a reality. The number of channels is slated to go from 150 to 400 in a few months. Plus, digital video recorders and high definition (HD) are on their way. This has doubled the industry growth.
A DVR allows consumers to pause, record, play back, rewind and fast forward their favorite television shows. Industry sources said that DTH companies are expected to slash DVRs box prices by nearly half to $175 to $200 per unit. DVRs for cable channels would soon be available for between $75 and $100 (Rs.7000 to Rs.8000). At the same time, Dish TV and Tata Sky have been announcing attractive price and packaging offers for their DTH services. Since the launch of their services, the price of a DTH connection has plummeted by 15 to 20 percent. According to an industry source, the main worry for DTH incumbents is the pricing of DVR boxes by RCom's Big TV which may offer a DVR-DTH connection at $125 to $175 along with financing schemes. "Other cable companies such as Zee Group's WWIL and InCable are also toying with the idea of the launch of DVRs," the sources added.
The new direct-to-home (DTH) players, who have so far been competing on the telecom front, are now battling for mindshare with their smart ad campaigns.For instance, Reliance ADAG’s Big TV and Bharti Airtel’s Digital TV have unleashed a new ad game of sorts. While Bharti Airtel ran advertisement teasers for its new DTH business for a week before officially launching the service on October 9, arch rival Big TV, launched in August, unleashed its counter campaign on October 2nd.It’s a close match and an expensive affair too. It’s estimated that the monthly ad spends by the five existing players are around Rs 30-40 crore, making it one of the costliest product category in recent times, similar to the well-documented battles of the two cola companies.But its results could be felt by the fact that while three months ago, the industry was acquiring 2.5 lakh customers every month, the number has now doubled to 5 lakh, and could go up to 7-8 lakh in a few months once the new players settle down.
As the battle to grab more subscribers continues unabated. With DTH making its appearance in India, there is likely to be a rice, programming and technology war to attract DTH subscribers. As in the telecom sector, let's hope the consumer wins.
India too experimented first with satellite television in the mid 1970s under the SITE programme and later in 1982 with the Doordarshan national network. The exponential growth of cable TV in India in the 1990s made us a part of the global satellite television revolution.Now the stage is set in India for the next generation of satellite TV -- Direct to Home broadcasting.Location and accessibility to the cable line no longer matters in a DTH scenario. That's because the programmes are beamed directly to the television at home.
Direct broadcast satellite (DBS) is a term used to refer to satellite television broadcasts intended for home reception, also referred to more broadly as direct-to-home signals. The expression direct-to-home or DTH was, initially, meant to distinguish the transmissions directly intended for home viewers from cable television distribution services that sometimes carried on the same satellite.
What happens when four biggies of the Indian business world (i.e., TATA group , Reliance ADAG group , Bharti group & the Essel Group) decide that each wants to rule the same segment? One, their pockets burn real deep. Two, customers rule.
In the Direct to Home (DTH) market, installation charges as low as Rs 1,400 and a dirt cheap monthly subscription cost — less than Rs 100 — are fast becoming a reality. The number of channels is slated to go from 150 to 400 in a few months. Plus, digital video recorders and high definition (HD) are on their way. This has doubled the industry growth.
A DVR allows consumers to pause, record, play back, rewind and fast forward their favorite television shows. Industry sources said that DTH companies are expected to slash DVRs box prices by nearly half to $175 to $200 per unit. DVRs for cable channels would soon be available for between $75 and $100 (Rs.7000 to Rs.8000). At the same time, Dish TV and Tata Sky have been announcing attractive price and packaging offers for their DTH services. Since the launch of their services, the price of a DTH connection has plummeted by 15 to 20 percent. According to an industry source, the main worry for DTH incumbents is the pricing of DVR boxes by RCom's Big TV which may offer a DVR-DTH connection at $125 to $175 along with financing schemes. "Other cable companies such as Zee Group's WWIL and InCable are also toying with the idea of the launch of DVRs," the sources added.
The new direct-to-home (DTH) players, who have so far been competing on the telecom front, are now battling for mindshare with their smart ad campaigns.For instance, Reliance ADAG’s Big TV and Bharti Airtel’s Digital TV have unleashed a new ad game of sorts. While Bharti Airtel ran advertisement teasers for its new DTH business for a week before officially launching the service on October 9, arch rival Big TV, launched in August, unleashed its counter campaign on October 2nd.It’s a close match and an expensive affair too. It’s estimated that the monthly ad spends by the five existing players are around Rs 30-40 crore, making it one of the costliest product category in recent times, similar to the well-documented battles of the two cola companies.But its results could be felt by the fact that while three months ago, the industry was acquiring 2.5 lakh customers every month, the number has now doubled to 5 lakh, and could go up to 7-8 lakh in a few months once the new players settle down.
As the battle to grab more subscribers continues unabated. With DTH making its appearance in India, there is likely to be a rice, programming and technology war to attract DTH subscribers. As in the telecom sector, let's hope the consumer wins.
India's first moon mission is world's 68th
Chandrayaan-1, that lifted off in morning of October 22nd from Sriharikota, is India's first and the world's 68th mission to the moon, the earth's closest celestial body which has fascinated children, scientists and poets alike.
The world's first moon mission was by the then Union of Soviet Socialist Republics (USSR) on Jan 2, 1959, followed two months later by the US on March 3.Between them, the two countries have sent 62 missions to probe the moon with the US stealing a march over the then cold war rival USSR by landing a man on the moon on July 20, 1969.Japan broke the monopoly of the two superpowers on Jan 24, 1990 by sending its spacecraft Hiten to orbit the moon. The European Space Agency launched its probe in September 2003. China sent its spacecraft Chang-e last year. The Indian mission to the moon was proposed at a meeting of the Indian Academy of Sciences in 1999.Then prime minister Atal Bihari Vajpayee announced the project was on course in his Independence Day speech on Aug 15, 2003.
Chandrayaan-1, journey to moon is an unmanned lunar exploration mission by the Indian Space Research Organisation (ISRO), India's national space agency. It is also India's first mission to the moon. The mission includes a lunar orbiter and an impactor. The spacecraft was launched by a modified version of the PSLV Xl on 22 October 2008 from Satish Dhawan Space Centre, Sriharikota, Andhra Pradesh
Mission Definition and Goal
Chardrayaan-1 is the first Indian Mission to the Moon devoted to high-resolution remote sensing of the lunar surface features in visible, near infrared, X-ray and low energy gamma ray regions. This will be accomplished using several payloads already selected for the mission. In addition a total of about 10 kg payload weight and 10 W power are earmarked for proposals, which are now solicited. The mission is proposed to be a lunar polar orbiter at an altitude of about 100 km and is planned to be launched by 2007-2008 using indigenous spacecraft and launch vehicle of ISRO. The mission is expected to have an operational life of about 2 years.
The remote sensing satellite weighs 1,380 kilograms (3,042 lb) (590 kilograms (1,301 lb) initial orbit mass and 504 kilograms (1,111 lb) dry mass) and carries high resolution remote sensing equipment for visible, near infrared, soft and hard X-ray frequencies. Over a two-year period, it is intended to survey the lunar surface to produce a complete map of its chemical characteristics and 3-dimensional topography. The polar regions are of special interest, as they might contain ice.
Objectives
The stated scientific objectives of the mission are:
To design, develop and launch and orbit a spacecraft around the Moon using Indian made launch vehicle.
Conduct scientific experiments using instruments on-board the spacecraft which will yield the following results:
To prepare a three-dimensional atlas (with high spatial and altitude resolution of 5-10 m) of both near and far side of the moon.
To conduct chemical and mineralogical mapping of the entire lunar surface for distribution of mineral and chemical elements such as Magnesium, Aluminum, Silicon, Calcium, Iron and Titanium as well as high atomic number elements such as Radon, Uranium & Thorium with high spatial resolution.
To Impact a sub-satellite ( Moon Impact Probe -MIP ) on the surface on the Moon as a fore-runner to future soft landing missions.
Specific areas of study
High-resolution mineralogical and chemical imaging of permanently shadowed north and south polar regions.
Search for surface or sub-surface water-ice on the Moon, specially at lunar poles.
Identification of chemical end members of lunar high land rocks.
Chemical stratigraphy of lunar crust by remote sensing of central upland of large lunar craters, South Pole Aitken Region (SPAR) etc., where interior material may be expected.
To map the height variation of the lunar surface features along the satellite track.
Observation of X-ray spectrum greater than 10 keV and stereographic coverage of most of the Moon's surface with 5m resolution
To provide new insights in understanding the Moon's
Cost Structure
The Chandrayaan-1 spacecraft is cuboid in shape, weighs 1,304 kg at launch and 590 kg at lunar orbit. It will carry 11 payloads, including six from abroad.
Chandrayaan-1 costs Rs.3.86 billion (about $76 million): Rs.530 million (about $11 million) for Payload development, Rs.830 million (about $17 million) for Spacecraft Bus, Rs.1 billion ($20 million) for Deep Space Network, Rs.1 billion ($20 million) for PSLV launch vehicle, and Rs.500 million ($10 million) for scientific data centre, external network support and programme management expenses.
Men behind the mission
The scientists considered instrumental to the success of the Chandrayaan-1 project are
G. Madhavan Nair – Chairman, Indian Space Research Organisation
T. K. Alex – Director, ISAC (ISRO Satellite Centre)
Mylswamy Annadurai – Project director
S. K. Shivkumar – Director - Telemetry, Tracking and Command Network.
George Koshi –Mission Director
Srinivasa Hegde – Mission Director
M Y S Prasad – Associate Director of the Sriharikota Complex and Range Operations Director
J N Goswami – Director of the Ahmedabad-based Physical Research Laboratory and Principal Scientific Investigator of Chandrayaan-1
Narendra Bhandari – Head, ISRO`s Planetary Sciences and Exploration program
Chandrayaan II
Future
The ISRO is also planning a second version of Chandrayaan named Chandrayaan II. According to ISRO Chairman G. Madhavan Nair, "The Indian Space Research Organisation (ISRO) hopes to land a motorised rover on the Moon in 2009 or 2010, as a part of its second Chandrayaan mission. The rover will be designed to move on wheels on the lunar surface, pick up samples of soil or rocks, do in site chemical analysis and send the data to the mother-spacecraft Chandrayaan II, which will be orbiting above. Chandrayaan II will transmit the data to Earth."Chandrayaan II
The world's first moon mission was by the then Union of Soviet Socialist Republics (USSR) on Jan 2, 1959, followed two months later by the US on March 3.Between them, the two countries have sent 62 missions to probe the moon with the US stealing a march over the then cold war rival USSR by landing a man on the moon on July 20, 1969.Japan broke the monopoly of the two superpowers on Jan 24, 1990 by sending its spacecraft Hiten to orbit the moon. The European Space Agency launched its probe in September 2003. China sent its spacecraft Chang-e last year. The Indian mission to the moon was proposed at a meeting of the Indian Academy of Sciences in 1999.Then prime minister Atal Bihari Vajpayee announced the project was on course in his Independence Day speech on Aug 15, 2003.
Chandrayaan-1, journey to moon is an unmanned lunar exploration mission by the Indian Space Research Organisation (ISRO), India's national space agency. It is also India's first mission to the moon. The mission includes a lunar orbiter and an impactor. The spacecraft was launched by a modified version of the PSLV Xl on 22 October 2008 from Satish Dhawan Space Centre, Sriharikota, Andhra Pradesh
Mission Definition and Goal
Chardrayaan-1 is the first Indian Mission to the Moon devoted to high-resolution remote sensing of the lunar surface features in visible, near infrared, X-ray and low energy gamma ray regions. This will be accomplished using several payloads already selected for the mission. In addition a total of about 10 kg payload weight and 10 W power are earmarked for proposals, which are now solicited. The mission is proposed to be a lunar polar orbiter at an altitude of about 100 km and is planned to be launched by 2007-2008 using indigenous spacecraft and launch vehicle of ISRO. The mission is expected to have an operational life of about 2 years.
The remote sensing satellite weighs 1,380 kilograms (3,042 lb) (590 kilograms (1,301 lb) initial orbit mass and 504 kilograms (1,111 lb) dry mass) and carries high resolution remote sensing equipment for visible, near infrared, soft and hard X-ray frequencies. Over a two-year period, it is intended to survey the lunar surface to produce a complete map of its chemical characteristics and 3-dimensional topography. The polar regions are of special interest, as they might contain ice.
Objectives
The stated scientific objectives of the mission are:
To design, develop and launch and orbit a spacecraft around the Moon using Indian made launch vehicle.
Conduct scientific experiments using instruments on-board the spacecraft which will yield the following results:
To prepare a three-dimensional atlas (with high spatial and altitude resolution of 5-10 m) of both near and far side of the moon.
To conduct chemical and mineralogical mapping of the entire lunar surface for distribution of mineral and chemical elements such as Magnesium, Aluminum, Silicon, Calcium, Iron and Titanium as well as high atomic number elements such as Radon, Uranium & Thorium with high spatial resolution.
To Impact a sub-satellite ( Moon Impact Probe -MIP ) on the surface on the Moon as a fore-runner to future soft landing missions.
Specific areas of study
High-resolution mineralogical and chemical imaging of permanently shadowed north and south polar regions.
Search for surface or sub-surface water-ice on the Moon, specially at lunar poles.
Identification of chemical end members of lunar high land rocks.
Chemical stratigraphy of lunar crust by remote sensing of central upland of large lunar craters, South Pole Aitken Region (SPAR) etc., where interior material may be expected.
To map the height variation of the lunar surface features along the satellite track.
Observation of X-ray spectrum greater than 10 keV and stereographic coverage of most of the Moon's surface with 5m resolution
To provide new insights in understanding the Moon's
Cost Structure
The Chandrayaan-1 spacecraft is cuboid in shape, weighs 1,304 kg at launch and 590 kg at lunar orbit. It will carry 11 payloads, including six from abroad.
Chandrayaan-1 costs Rs.3.86 billion (about $76 million): Rs.530 million (about $11 million) for Payload development, Rs.830 million (about $17 million) for Spacecraft Bus, Rs.1 billion ($20 million) for Deep Space Network, Rs.1 billion ($20 million) for PSLV launch vehicle, and Rs.500 million ($10 million) for scientific data centre, external network support and programme management expenses.
Men behind the mission
The scientists considered instrumental to the success of the Chandrayaan-1 project are
G. Madhavan Nair – Chairman, Indian Space Research Organisation
T. K. Alex – Director, ISAC (ISRO Satellite Centre)
Mylswamy Annadurai – Project director
S. K. Shivkumar – Director - Telemetry, Tracking and Command Network.
George Koshi –Mission Director
Srinivasa Hegde – Mission Director
M Y S Prasad – Associate Director of the Sriharikota Complex and Range Operations Director
J N Goswami – Director of the Ahmedabad-based Physical Research Laboratory and Principal Scientific Investigator of Chandrayaan-1
Narendra Bhandari – Head, ISRO`s Planetary Sciences and Exploration program
Chandrayaan II
Future
The ISRO is also planning a second version of Chandrayaan named Chandrayaan II. According to ISRO Chairman G. Madhavan Nair, "The Indian Space Research Organisation (ISRO) hopes to land a motorised rover on the Moon in 2009 or 2010, as a part of its second Chandrayaan mission. The rover will be designed to move on wheels on the lunar surface, pick up samples of soil or rocks, do in site chemical analysis and send the data to the mother-spacecraft Chandrayaan II, which will be orbiting above. Chandrayaan II will transmit the data to Earth."Chandrayaan II
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