MTS India Puts Its Faith in Data
The CDMA operator launched its data services offerings in November 2009, and by the end of January this year about 10,000 of its 3.2 million customers were using mobile data applications.
"Voice ARPUs are dipping very significantly, so it makes sense to focus on data," MTS India's CIO, Rajeev Batra, tells Light Reading Asia. "Our ARPU for data services is between 500 and 600 Rupees [US$11.10 and $13.31]," adds Batra, an Indian telecom industry veteran.
MTS India, which operates in 11 of India's circles (service areas), but which has a license for all 22, offers its data services in about 24 cities, but has plans to extend this to 100 cities by the end of this year. "We are adding significant numbers month-on-month. We have covered the metros [the major Indian cities of New Delhi, Mumbai, and Kolkata]. We see a latent demand in Tier 2 or B-towns also." (See A Guide to India's Telecom Market for more on India's circles.)
However, the carrier, which is considering an IPO later this year, has decided not to apply to take part in India's 3G auction, focusing instead on 2G investments and making best use of its existing spectrum. (See Bids Flood In for India's Spectrum Auctions and India Watch: 3G Wait Over?)
The operator's data services strategy involves targeting enterprise customers and the youth market: Young people are among the prime users of data services in India. (See Report: Mobile Internet Yet to Take Off in India.)
"We are targeting the young professionals, and we [plan to] offer better types of devices in the market" to meet the needs of that demographic, says the CIO. (See India Sees CDMA Handset Growth.)
He says the operator is brokering deals with "big names" to source high-end devices, but declined to identify any potential partners at this time.
"Besides the youth, we see potential in the enterprise segment, not just for large enterprises but in the small and medium enterprises as well," with plans to offer cloud computing and other corporate applications.
In addition, MTS India has run mobile TV service trials and plans to launch a commercial service soon in all the circles where it currently operates. The operator is also planning to announce partnerships to launch its services into the netbook user sector.
Batra believes these moves will help counter the current perception that CDMA can't provide high-end services. "We will break the perception that CDMA is a poor cousin of GSM."
CDMA still suffers from the perception that it is an inferior technology, because of the low tariffs and low-end handsets associated with the initial services launched by India's CDMA operators about nine years ago. More recently, those CDMA players, Reliance Communications Ltd. and Tata Teleservices Ltd. , have launched GSM services to run in parallel with their CDMA offerings and have, in the past, hinted at discrimination by the government in favor of GSM. Considering all those factors, it was a surprise when Sistema opted to build a CDMA network.
But the CIO explains that Sistema chose CDMA as its underlying mobile technology, even while India's CDMA players were moving towards GSM, because of the technology's data service strengths. He says the company had to do all it could to grow in an already large market -- the operator launched its initial voice services in October 2008 when there were already more than 300 million mobile lines active in the country -- and "the best way to do that was through a CDMA network. Data speed on CDMA is far more stable, superior, and uniform. It is a better technology." (See India: Still Booming, Attracting Investment and Shyam Launches CDMA Service.)
Another way MTS India distinguishes itself from many of its rivals is that it is not planning a major push just now into rural areas. Batra says that, while the company will cover the rural areas with its voice service, expanding its data services into rural areas, where ARPUs are even lower than in the cities, will only come when there is a greater penetration of PCs outside the cities.
— Gagandeep Kaur, India Editor, Light Reading