Fedex is cancelling its order of 10 A380s because of Airbus’ delivery delays, and getting 15 Boeing 777s instead. This comes after Virgin Atlantic’s deferment of its order for 10 planes last month. Of the big customers left (scroll down for ‘A380 Orders So Far’ on this page) Emirates is already making threatening noises and has cancelled some A340 orders, Singapore Airlines could cancel or ask for a deferment (which results in no money flowing into Airbus’ coffers, although I’m guessing they’ll book the revenue anyway), and UPS will be under pressure to look at Boeing as well. Only Lufthansa and Air France look like reliable customers.

Given the number of people Airbus employ, none of this is likely to be well-received in Europe. However, given the reorganisations at Airbus the A380 delays have prompted, a leaner, more effective Airbus may be the lemonade that came out of the A380 lemon.

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Amr Awadallah: 22% sequential growth for a $1919M Q4 is still very impressive, but it missed the expectations and it certainly does not justify the $500 to $600 stock price targets that some analysts are setting. To put things in perspective, Microsoft with a marketcap of $300B did $11B in sales last quarter, that is almost double what Google made for the whole year, so how can Google get a marketcap of $150B (at $500 price target). I think Greenspan had a word for this, let me try to remember, ah, he called it “irrational exuberance”.

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So Google finally IPOs — with an approach as unusual as its approach to webmail. The founder’s letter in their S1 filing eloquently argues the case for taking the long view:

Although we may discuss long term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders’ interests, and we believe that artificially creating short term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short term targets is as pointless as a dieter stepping on a scale every half hour.

For now, Google is probably not going to change the world, and the IPO is probably a bad idea for many investors; but for those with the pockets to take a risk, there are promises aplenty.

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Wired: Wi-Fi isn’t a luxury or even a commodity. It’s a condiment.

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Free incoming calls is a go from May 1 onwards, about four months after the TRAI originally presented the proposal.

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ToI: Telecom operators shun comment on TRAI tariff. I missed this point in the TRAI recommendation: WLL operators are now free to determine their own tariffs, and are not linked to fixed-line rates anymore. Bing! Looks like Reliance’s 20p/minute (or 5p per 15s pulse) plan will be making a comeback after all.

The linked article makes amusing reading incidentally: According to the basic telecom industry, TRAI had ushered in a Calling Party Pays (CPP) regime through the back door and thus lost out in the battle as they would now be paying to cellular operators on equal basis. So CPP is now a bad thing?

Cellular operators cried foul over TRAI giving free hand to WLL operators to determine their tariffs. And why shouldn’t they?

They also decried TRAI announcing free incoming calls on cell phones without levying any additional fixed charges. If this quote is accurate, I’d be surprised — cellcos have been asking for this for some time now, it’s unthinkable that they won’t pass on the benefit to their subscribers.

Overall, the TRAI seems to have redeemed itself this time — the proposal seems to be quite fair to all parties (curmudgeons protesting the local-call-tariff hike notwithstanding).

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For those who ask how does the customer gain from hiked local call prices: for a nation as large and heterogenous as India, the business efficiencies brought about by cheaper long-distance communication (update: note that long-distance calls have subsidized local calls for a long time now, and rational pricing for both is a welcome move and long overdue) is a huge win: for inter-state commerce, for improved business response times, for increased competition. These business efficiencies will trickle down to the individual too.

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The TRAI recommendations are out
(coverage from Rediff,

Sify), and they aren’t as bad as the
Financial Express thought it would be. Key points: local call charges have been hiked, and one of the biggest bugbears of the cellcos,
termination charges, has been addressed: fixed line and WLL operators will pay a fee to cellcos for calls to their network. This means that we are finally getting away from the notion that cellphone use is somehow an elite activity, something only the well-heeled (who can afford to pay for the privilege of receiving calls) do, and can finally see Calling-Party-Pays in India. Of course, cellcos will continue to pay
termination charges to fixed and WLL operators.

I’m happy about this for one reason: cellcos can now quit weaseling about the “unfair playing field” (the same unfair playing field that they were happy to play on for years before they saw real competition in Reliance) and compete on merits. What’ll be even cooler is if the TRAI removes the fiction of “limited mobility” (a.k.a castration of technology by government fiat) and allowed WLL operators to allow full-mobility services after paying the necessary fees. Given that the Ambanis and Pramod Mahajan is open to this, I expect this to happen within the next three months. This is a win-win for everyone as far as I see: companies compete on their strengths, customers get real choice in choosing services based on what is important to them, the telecom market itself grows:

It’s pretty apparent that GSM cellcos have a real opportunity to rule the
mobile voice market, given dirt-cheap handsets (This is CDMA’s Achilles’ Heel).
Mobile CDMA networks (even limited mobile ones) will rule the mobile data market
in the near term if they can deploy
CDMA 2000 1XEV-DO
quickly. Despite what they say, I think GSM cellcos in India will have trouble deploying 3G/WCDMA –
even now, except for BPL in Bombay, cellcos’ 2.5G/MMS plans are vaporware (Airtel is particularly galling,
with a its-here-real-soon-now announcement every six months). Considering the
serious issues
3G/WCDMA has with carrier/handset compatibility and backward compatiblity, I don’t see
3G offerings from Indian GSM cellcos at affordable prices anytime soon.

And of course, you cannot afford to forget that between Reliance and Bharti,
there’s about 90,000km of fiber laid out in India. Reliance plans to take this
to corporations in mid-2003, and to homes by end-2003 — the "last mile" being
Ethernet in this case:

Given their ability to mess up with clockwork precision, I can’t even begin
to imagine what the TRAI will make of all this. But if Reliance and Bharti are
to really leverage their investment in fiber, then not offering this to paying
customers is unthinkable for them… it’s only a matter of time before they do.

India’s telecom biz is in for some very
interesting
times.

*VoIP is currently not permitted for intra-India calls. But with
proliferation of broadband, either VoIP has to be allowed or telcos will lose
revenue to peer-to-peer voice chat software, which despite causing a
lot of frustration to telcos will be impossible to ban.

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The TRAI is supposed to release its revised tariff recommendations today. This FE article doesn’t paint too optimistic a picture for those who were looking for Caller-Party-Pays: CPP will be the norm everywhere, they suggest, unless you are calling from a fixed-line phone, essentially a BSNL phone (Bharti does offer fixed-line services through Touchtel, so could Reliance). Today will be a good litmus test for the TRAI: do they genuinely have the interests of the common man, and the development of India’s anemic telecom sector, in mind; or are they merely a “regulatory” facade for the maintenance of the old telecom raj that BSNL inherited? Stay tuned for their recommendations today.

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Reliance and Bharti have strike deal on interconnect rates. As Ravi Prasad points out, this is probably the first sane Calling-Party-Pays regime in India. Now if only BSNL would follow suit… thankfully, there will now be quite a bit of pressure on them to do so.

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