Over the past year, Reliance Communications (RCOM) has been focusing on its data strategy to add customers and stay ahead of the competition. Its efforts seem to have paid off, with the company registering over 9 million 3G customers and data usage on its network increasing by 116 per cent year on year.

In an interview with tele.net.in, Gurdeep Singh, president and chief executive officer, RCOM, discusses the company’s performance in the data segment over the past year, its recent launch of the iPhone 5S and iPhone 5C on the company’s network, and future plans…

What are the company’s plans with respect to 3G services?

RCOM aims to make mobile communications accessible to every customer. Since the company entered the market, we have always ensured that ownership of a mobile connection is not limited to a few, but is made affordable and accessible to a much wider demography. We now intend to replicate this success in the data space as well.

The company aims to provide affordable high speed data services to every smartphone and tablet user. By breaking the 3G entry barrier with various plans offering 3G data at 2G rates, we plan to extend the benefits of quick data access to every customer. In fact, over the past few days, our competitors have followed suit and reduced 3G data rates, which will help further broad-base the market, increase volumes and make high speed data services accessible to a wider customer base.

What has been the response to the company’s 3G services?

So far, the uptake of the company’s data services has been very promising, and has further consolidated RCOM’s position in this segment. We currently have over 34 million mobile internet customers, of which over 9.1 million (around 27 per cent) utilise active 3G data services. Therefore, nearly 25 per cent of our overall customer base uses data services.

We witnessed 31 per cent year-on-year growth in our wireless data customer base as of September 30, 2013. Our 3G customer base has also witnessed exponential growth of about 90 per cent year on year, to reach over 9.1 million. The total data usage on our network has witnessed 116 per cent year-on-year growth to reach 37,570 Tb, and the data usage per subscriber stands at 386 MB. In all, 23.4 per cent of RCOM’s wireless revenues come from non-voice services.

RCOM’s 3G network is spread across 333 towns in 13 circles. What level of investments is the company looking at to upgrade and expand this network?

RCOM’s 3G network has been built for video, and we continue to expand it, in keeping with the company’s roll-out and footprint expansion plans. RCOM has issued a pan-Indian capex guidance of around Rs 15 billion for 2013-14, largely on account of expansion of its 2G, 3G and high speed data networks.

As far as our 2G networks are concerned, both on the GSM and CDMA platforms, we have undertaken an innovative expansion drive through intra-circle roaming arrangements with Aircel, Loop Telecom and Tata Teleservices Limited. Through this “smart expansion” drive, we now have access to an additional 10,000 base transceiver stations. This has helped in significantly improving our network reach and expanding our market by around 150 million potential customers, and is expected to generate revenues of Rs 100 billion. The company is also in talks with other operators for similar arrangements; we will announce the same in a phased manner.

RCOM operates both CDMA and GSM (2G and 3G) networks, which are strengthened by our wireline and pan-Indian optic fibre cable networks.

Operating three different network types must involve several complexities. What challenges do you face in this regard?

Yes, multiple platforms, technologies and application offerings do involve increased network complexities, and with a view to improving efficiencies and productivity, RCOM outsourced the end-to-end network management to Alcatel-Lucent and Ericsson under multi-billion dollar long-term contracts earlier this year. This move will help further optimise network utilisation and ensure that our subscribers continue to enjoy a seamless and superior telecom experience. Through this initiative, RCOM intended to bring in the expertise of leading vendors to implement transformational projects which will provide customer management solutions as well as address issues related to performance, faults and security.

What is the company’s strategy with regard to mobile number portability (MNP)?

Driven by innovative offerings and the advantage of a superior network, RCOM has witnessed significant subscriber additions through MNP, which has been very encouraging. The port-ins under MNP have largely been higher-revenue customers who have been looking to switch to a network suited for video and high speed browsing.

What strategies have you adopted to increase data usage?

The company is working towards encouraging the adoption of data services. To this end, we are creating an ecosystem for data services through our 3G and high speed data networks, providing affordable products and services by entering into partnerships with leading handset brands. We have also partnered with social media networks and content providers to allow easy access to social networks, extensive video content, photo sharing, music downloads, wallpapers, etc.

Technically, the end-user experience depends as much on network architecture and efficiency as on the handset or data device being used. In this backdrop, we have not only launched programmes to educate customers but have also tied up with leading device manufacturers to provide a robust device ecosystem for our customers. For instance, we launched the Reliance 3G Tab last year, which introduced the concept of “affordability with quality” in India.

Also, we recently launched the Apple iPhone 5C and iPhone 5S, which are witnessing significant uptake. Our approach to this launch has been – “How do we put this device into the hands of every Indian?” Thus, we set out to achieve this by making these phones affordable and giving true value for money to our customers. Our premise is that if someone has a credit card, they should be able to have an Apple iPhone 5C or iPhone 5S.

In line with this, we launched the “Zero Plan”, which does not entail any down payment, has no bills for 24 months, and offers unlimited voice usage, text and data services. It is a simple, uncomplicated plan, in keeping with our intention of making a transparent and straightforward offer. This is a contract offer, similar to what customers have been availing of in the US and other countries. Going forward, RCOM will bring more aggression into the bundled plans, making it a significant part of our overall sales figures.

In all, with the establishment of a seamless network, by making 3G available at 2G rates, and by increasing the availability of affordable and quality handsets and devices, RCOM has achieved significant internet traffic growth on its network.

What are the key drivers for the company’s 3G sales?

We believe that the larger the screen size and the processing capacity of a device, the greater is the user experience and, therefore, data consumption and revenues. With the launch of the Apple iPhone 5C and iPhone 5S, on the back of several other launches earlier in the year, we want to emerge as the dominant player in the data market.

What are RCOM’s plans for increasing the uptake of utility applications?

With the evolution of the internet on mobile devices, and with the Android Open Platform supporting unrestricted access to content across the internet, telecom operators are moving from a closed web ecosystem to an open web-based content strategy. Operators’ application stores are becoming less relevant in this scenario, with the uptake of Android-based phones increasing significantly. The mobile application environment is expected to reach a new equilibrium with the establishment of popular application platforms. RCOM aims to improve the data usage ecosystem for its customers. To this end, several initiatives are being launched to make the best options available to our customers.

With over 60 per cent of India’s population being under the age of 35, specific applications are gaining volumes and a robust ecosystem for utility applications will be developed in the future.