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Spoonfeedin WOrld


Smita Joshi Saha

Nordic telecom giant Telenor, which recently secured 67% equity in Unitech Wireless, is eager to roll out its services in India. With its organisation model based on 11 hubs, Telenor is targeting a market share of 8% over a period of 8-9 years. Talking to FE’s Smita Joshi Saha, Stein Erik Vellan, MD of Unitech Wireless, talks about mobile number portability, tower sharing agreements and its desire to be a part of 3G in India in future. With its services set to be launched in the fourth quarter of calendar year 2009, Unitech will invest about Rs 2,500-3,200 crore in 2009. Excerpts:

What are your plans for 3G in India?

We will not bid for pan-India 3G licences but will be a part of 3G in the country in some way. The final decision on this will come from our shareholders, which will be put in place within a month’s time from now. There are many ways to be a part of 3G in the country, and we are looking at all sort of these strategies, which will also be within the framework of how the licences requirement in 3G is put together.

Has Unitech Wireless received the entire Rs 6,100 crore from Telenor? How much equity is yet to be received from Telenor and when is it expected?

At present, the Telenor Group has invested Rs 2,620 crore through subscription of new shares in the JV company. The present agreement between the shareholders allows the Telenor Group to raise this investment to Rs 6,100 crore. The application for this additional investment has been recommended for the consideration of the Cabinet Committee on Economic Affairs (CCEA) by the Foreign Investment Promotion Board (FIPB). Upon approval, the Telenor Group will be able to invest the remaining amount as per the terms of the shareholders’ agreement.

What harm will delayed mobile number portability (MNP) cause to new entrants like Unitech Wireless?

We believe that MNP will largely be neutral for operators. Yes, the large percentage of churn in India that some estimates put as high as 30% to 40%, make for an attractive case for MNP. However, a large percentage of subscribers are on pre-paid and not so significantly affected by MNP. Having said that, MNP is important, as is any policy that encourages competition on a level playing field and gives more choice to the consumer. We look forward to an early implementation.

Apart from Tata Quippo, are you looking at other players for tower sharing agreements or will you put up your own towers in India?

We will not build any tower by ourselves. Currently, Tata Quippo is providing us with more than enough towers for short to medium term. And, of course we will discuss with them and also others when we take a decision on next phase of our roll out.

Are you in talks with the country’s BPO players for your customercare centre?

Yes, we are planning to have three different call centres in India and we are also looking at a tie up with few BPO players for providing services. However, I cannot share their names. But all our outsourced services will come from Indian companies. We will not outsource anything outside the country.

What will be your tariff strategy?

We would not be able to disclose our tariff strategy at this time. We understand that differentiation in a market as competitive as India is crucial. However, we also believe that tariff is not the only route for differentiation. It must be a complete package that makes a prospective customer choose our service over others in the market.

According to you, for Telenor, India is not about size, its about handling complexities also. Can you elaborate what kind of complexities?

It will be a lack of understanding of the Indian market if one considers the country as just a 1.2 billion people market. The complexity here lies in understanding the difference in how people are buying mobile services like in Chennai as compared to Mumbai or Orissa and so on. India has 402 different dialects, it also has lot of illiterate people, that’s about complexity. When you bring in a new brand where the target is consumers, you really have to know what their every day life is all about, whether they live in metropolitan cities or in the suburbs.


September 24, 2009 - Posted by | Uncategorized |

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