Interview: Rajiv Bawa, EVP Corporate Affairs, Uninor
The operator, formerly known as Unitech Wireless, has a license covering all 22 of India's service areas ("circles"), and spectrum in 21 (with Delhi the exception). It launched its GSM services in seven circles -- Uttar Pradesh West, Uttar Pradesh East, Bihar (including Jharkhand), Tamil Nadu, Karnataka, Kerala, and Andhra Pradesh -- in early December 2009, adding an eighth, Orissa, later in the month. (See Uninor Launches in India, Uninor Launches in Orissa, and A Guide to India's Telecom Market.)
And the operator is not fazed by the intensifying competition in the country's wireless services sector. Ever decreasing average revenue per user (ARPU) and an increasing number of operators in India's mobile market are not deterring Uninor's management, which is taking a long-term view as it plans its operational rollout. (See Indian Operators Battle Brutal Market.)
One reason for Uninor's seemingly measured approach to the market, which is growing currently at about 20 million new lines per month, derives from its main backer, Norway's Telenor Group (Nasdaq: TELN), which plans to leverage its experience in nearby markets such as Bangladesh and Pakistan as it steers Uninor through the coming years. (See Telenor Invests More in Uninor and India Ends 2009 on a Mobile High.)
So what is Uninor's strategy as it takes on established giants like Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Reliance Communications Ltd. , Vodafone India , and Tata Teleservices Ltd. ? (See India Passes 500M Mobile Mark.)
Light Reading spoke with Rajiv Bawa, executive VP for corporate affairs at Uninor, to find out.
Light Reading: Uninor has signed up 1.2 million subscribers in the first month of operations. What is your target subscriber base and revenue for the coming year?
Rajiv Bawa: We are here for a long haul, and all our targets are for a longish period. We have decided to take a long-term view of the Indian market. We are targeting to get 8 percent of the market by 2018.
LR: How would you differentiate your services and strategy from what is already available in the market?
Bawa: There have been some differentiating factors where Uninor is concerned, which have led to us garnering a reasonable number of subscribers in such a short time. The first thing is our positioning. We are focusing on the common man, and it is for this reason that we haven’t signed a cricketer or a film star as a brand ambassador.
We are targeting the young India. Our tag line is "Ab Mera Number Hai" [loosely translated as "It's my turn now"]. Our pricing plan is also somewhat different… We are offering two tariff plans based on the usage pattern of the subscriber. In the next wave we [plan to launch services] in three-to-six circles, but we haven't decided any timeline.
LR: Outsourcing appears to be an important part of your strategy. What is your operational model?
Bawa: Our working model is very different. First of all, we believe in outsourcing. We have just 2,300 employees. We have a very low-cost operating model to ensure that we have a lean organization. Wipro Ltd. (NYSE: WIT) is managing our entire IT. We are even outsourcing our human resources and finance operations. (See Unitech Wireless Outsources IT to Wipro.)
Apart from that, we have decentralized operations. We have 11 hubs to cater to 22 circles, which would cover 100 million of population. Six hubs are already up.
LR: What is your policy regarding the impending 3G auction? Will you be bidding for a pan-India 3G launch?
Bawa: We don’t want 3G pan-India. We want the government to concentrate on the overall spectrum policies. The spectrum policies are unclear to begin with. Regarding the 3G auction, we would take a final call once we have a clearer idea about the processes and the timeline of the auction. As of now, we are focusing on our 2G launch in the country.
LR: Many believe that there is too much of a fight in the voice segment with ARPUs already touching rock bottom. Will you be focusing on data services, like your peer Sistema Shyam TeleServices Ltd. [MTS India]?
Bawa: Well, going forward, there is going to be too much of a fight in the data services as well. As of now, more than 90 percent of the market is still in voice. We would be focusing on voice, at least in the short term. Over a period of time, data services might become important.
LR: How important are value-added services for Uninor? What kind of services are you planning in this segment?
Bawa: VAS is very important area and we are planning a number of things. We would leverage Telenor’s expertise in Bangladesh. We will also address the rural market a little differently... We have to address the rural market… Teledensity in the state of Bihar is just 20 percent, so a lot remains to be done.
LR: As a new operator, what are your expectations from the government?
Bawa: We would like the government to help us where spectrum policy is concerned. For instance, in Delhi we don’t have any spectrum. When we got the license we were given 4.4MHz and we were told that we would be given extra spectrum when we reach a certain subscriber level. This is part of our contract. So, we look for transparency, a level playing field, consistent regulation from the government, and [clearer] interconnect policies.
— Gagandeep Kaur, India Editor, Light Reading