We’re not closed on the thought of partnerships: Videocon Telecom

Videocon Telecommunications (formerly Videocon Mobile Services) had plans to bid for additional 2 MHz spectrum in Punjab and Madhya Pradesh & Chhattisgarh and 900 MHz in Delhi circles.

However, the company, the mobile arm of the diversified Videocon Group, did not bid due to varied reasons. The company, apart from using spectrum augmentation technologies, would also look at bidding for the radiowaves in the next auctions.

Like any growing organisation, the company is also looking at partnerships and investments to grow its business, its Chief Executive Officer Arvind Bali said. Talking about the call tariffs, Bali told Business Line that he expects them to rise, which is good for the business. Edited excerpts:

Videocon Telecom had plans to bid for additional spectrum in Delhi Punjab and Madhya Pradesh & Chhattisgarh circles. Why didn’t you place bids?

We along with our team, consulting partners and board discussed the complete business plan and after a lot of contemplation and deliberation, we decided against participating in the auction.

Delhi is a very evolved market and in order to capitalise on the opportunity, a new player like us would need some differentiation.

We felt that 4G-LTE rollout could be a catalyst for making this differentiation, however, worldwide the 4G LTE ecosystem is not that evolved in the 900 MHz space, which makes the cost of deployment high, making 900 MHz not suitable and viable for 4G. In Punjab, 25 out of 92 blocks are not available in Ludhiana and Amritsar, and that’s exactly the places we are facing a little congestion.

So we would rather deploy more sites than acquiring spectrum. Also, as a business strategy, we will be focusing on Tier-II and Tier-III towns where we have good coverage and comparatively lower subscriber base.

Also, today there is technological upgradation available whereby spectrum augmentation is possible.

Now, without spectrum, how do you intend to launch operations across all the circles?

Spectrum is a very expensive resource. We have three big circles including Uttar Pradesh (W), Uttar Pradesh(E) and Bihar for rollout and it will take us minimum 6-8 months for getting these circles up and running.

Once all our seven circles are operational, we will look at participating in upcoming auctions.

On the 4G rollout plans using over the 1800 MHz band which Videocon Telecom won in 2012. What is the present status?

Our 4G rollout will be in a phased manner, going city by city.

We are in advanced stages of discussion with partners.

The outlook for our first 4G LTE rollout is about 6-8 months from now. We will be among the first ones to rollout 4G on 1800 MHz LTE-FDD in India.

Is Videocon looking at selling stake or raising funds for further operations?

Like every growing organisation, we are not closed on the thought of partnerships and investments to grow the business, and likewise there is also interest shown by others in our business for partnering and investment.

Do you see tariffs rising, and are you also planning a call rate hikes?

Definitely, tariffs are bound to go up and it will be good for the business.

India offers the lowest rate per minute across the world and this rationalisation was bound to happen.

It’s the incumbents who take the tariffs up, and once that happens, we too will raise the bar.

However, going by the Videocon brand philosophy, we will continue to offer tariffs lower than the prevailing market rates.

What are the additional plans on the VAS front?

We are now planning to rollout mobile wallet services ‘Videocon Telecom Money’ soon. We are in discussions with partners and banks on the same.

It is slightly a long drawn process given Reserve Bank of India clearances etc, but we are already on track.

Do you think spectrum price is too high for smaller players?

If everybody is paying same price, it will only encourage level playing field for all, hence encourage good and healthy competition.

Also, the auction mechanism of allocating the spectrum is the best way to determine the fair market price of this scarce resource.

However, I feel that 900 MHz spectrum for metros was a non-starter for any new player since the incumbents would have fought tooth and nail to retain the spectrum for obvious reasons and at this price, it would have made business case unviable for any new player.

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