New mobile operators Uninor, Sistema Shyam and Videocon Mobile Services are charting out fresh game plan to get back into the telecom market.
The three companies were part of the new players that were given licences in 2008 but got severely hit after the 2G spectrum scam led to their licences being cancelled.
New spectrum
While most of the players whose licences were scrapped chose to stay away, the three players are re-entering the mobile market after acquiring fresh spectrum through an auction process.
These players are embarking on different strategies to corner a piece of the highly competitive marker currently dominated by the likes of Bharti Airtel and Vodafone India.
While Telenor-backed Uninor is betting on doing the basics right, Sistema Shyam and Videocon are eyeing the growing data services market with fourth generation technology-based broadband offerings.
Speaking to Business Lin e, Yogesh Mallik, Chief Operating Officer, Uninor, said, “There is a large untapped mass market for basic mobile services. With our promise of being sabse sasta (the cheapest) and good quality of service we aim to be relevant to them.”
Uninor already has over 31 million subscribers in the six circles it is left with and has advanced its break even target to end of 2013 riding on a low cost business model.
“We have adopted a network strategy that delivers the lowest cost per minute. We carry 30 per cent more traffic than the incumbent,” said Mallik.
Uninor does not plan to get into the 3G or 4G space immediately because the company’s focus is to be a profitable, zero debt company.
According to Mallik, 2G technologies such as EDGE and GPRS would be more than enough to offer basic email and Internet browsing services. “Our strategy is aimed at our target audience. As we see our target audience move up to higher data services we will also evolve,” Mallik said.
Sistema Shyam, on the other hand, plans to build on its strength in the data market even though the operations have shrunk from 22 circles is now reduced to 9. The reduced footprint shaved off 25 per cent of the company’s business. “We have gone through some tough times over the last twelve months, but the doubts and the ambiguity is now over,” said Vsevolod Rozanov, President and CEO of Sistema Shyam TeleServices Ltd.
The company, with 10.58 million users, already gets about 27 per cent of its revenues from data services.
“Our focus will be on developing a stronger data franchise, restarting the smartphone business and harvesting voice segment,” Rozanov said.
data network
What works to Sistema Shyam’s advantage is that it has already rolled out data network in 350 towns and the fresh spectrum it has acquired is technology neutral. This means that it can move beyond CDMA technology to higher grounds including 4G technologies such as the Long Term Evolution (LTE). “This provides an opportunity for us to migrate to LTE and provide users with a better experience than 3G,” said Rozanov. Videocon Mobile Services wants to put equal focus on both voice and data. To start with the company will offer voice services at about 20-25 per cent below current market rates. By 2014, the company wants to get into the 4G space.
“We expect 20-25 million LTE subscribers in India by 2016. This shall be central to Videocon’s network roll out,” said Arvind Bali, CEO, Videocom Mobile Services.
The company has acquired 5 Mhz spectrum in the 1800 Mhz band and plans to split this for data and voice. According to Bali, the company will be able to offer 2 Mbps speed connections by using just 1.4 Mhz spectrum. That could change the Indian data market where 3G players are currently finding it difficult to offer speeds of over 1 Mbps on 5 Mhz spectrum.
New biz model
Analysts said the cancellation of licences has worked to the benefit of the three players.
“Although the companies had to write off billions of dollars owing to the old licences being cancelled, the new business model has offered the operator an opportunity to exit non-profitable circles and focus on areas where they want to. The new spectrum also allows them to deploy any technology and that means that they can chase new revenue streams,” said a Delhi-based telecom analyst advising one of the new operators.