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Business – Q&A;Sigve Brekke, Asia head of Telenor Group

Manoj Gairola

Telenor Group, a Norway-based telecom giant operating services in 13 countries, owns 49 per cent shares in Unitech Wireless Ltd, a new telecom licence holder. Telenor has filed an application with Foreign Investment Promotion Board to increase its equity in Unitech Wireless to 67.25 per cent and will launch its mobile services in India under Uninor brand by end-2009. Sigve Brekke, Asia head of Telenor Group, spoke to Hindustan Times on his India strategy. Excerpts:

Why are you entering India so late?

Telenor’s history has been built on growth. Our strategy has been to go to low penetration countries. India is one of the few markets left that are still growing. We have experience of entering low penetration markets. We also know how a market leader thinks as we are market leaders in Norway and in Bangladesh. We have learnt what works and what doesn’t. Since India has a low mobile penetration of 37 per cent, we can make a difference.

What are your India target?

We hope to acquire a market share of 8-9 per cent in four years. Our business plans are based on a very low cost model. We need to be cost effective. In three years, after launch, we want to be EBITDA (earnings before interest, taxes, depreciation and amortisation) positive.

Will you be bidding for 3G spectrum?

We formulated our business plans for India for 2G services. We are currently looking at 3G spectrum only in some of the circles. 3G services do not contribute significant revenues to operators anywhere in the developed markets.

What was the response of 3G services in Europe? What is the difference between Europe and Asian markets for 3G services?

In Europe, when 3G services were launched, fixedline was developed. People were used to accessing broadband through fixedline.

In Asia, 3G would provide the first opportunity for many people to connect to broadband as fixedline penetration is low. As far as India is concerned, I don’t think there will be real push for 3G.

What is your India strategy?

We are trying to build an organisation that is different from our competitors. We can utilise infrastructure of existing players such as towers. We are outsourcing IT. Therefore, we can build network on low cost. Our network would be cheaper than that of our competitors’. Also, since customer churn at 40 per cent is highest in the world, we would target both new and existing customers.

Do you think average revenue per user (ARPU) in India will come down from $4 (Rs 190) per month today?

I think ARPUs would continue coming down as telecom penetration grows. We have estimated that 35 per cent of subscribers have more than one SIM card. Operators can still make profits if costs are down

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October 15, 2009 - Posted by | Uncategorized |

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