In the hypercompetitive telecom market, Uninor has successfully created a niche for itself through its Sabse Sasta scheme and Internet for All campaign. The operator is betting big on the data space and making significant investments in educating consumers about the benefits offered by the internet. Tanveer Mohammad, chief operating officer, Telewings Communications Services Private Limited (Uninor), talks about the company’s performance in 2014 and its growth strategy for the future. Excerpts…

What are the company’s operational highlights and financial results?

In 2014, Uninor reported a 38 per cent increase in revenues and demonstrated a strong business performance with 10.85 million subscribers being added in its six circles. The ARPU for the company also went up by 6 per cent during this period. This was due to the increased usage of internet services and improved quality of service for its voice subscriber base. Uninor’s internet subscriber base rose by 106 per cent over the previous year and its revenue from internet services doubled during this period. It also accomplished the largest network expansion in a year with the deployment of 5,000 new sites.

In the first quarter of 2015, Uninor reported a 19 per cent year-on-year increase in revenues and a 26 per cent increase in subscribers. In the quarter ended March 2015, the company improved its earnings before interest, taxes, depreciation and amortisation by 40 per cent than that in the same period last year. It also witnessed a rapid adoption of internet services, with nearly 26 per cent of its customers accessing the internet on their mobile phones. Uninor launched its Sabse Sasta internet services in April 2014 and brought a paradigm shift in the market by moving to service pricing instead of volume-based pricing.

What are the key enablers for Uninor’s Sabse Sasta scheme, and what are the opportunities and challenges associated with this business strategy?

Uninor has differentiated itself on the basis of a three-pillar strategy: best in basic services, internet for all, and efficient operations. This strategy is backed by a best-in-class distribution network and simple, relevant products like service-based combo internet packs (rather than data usage-based  packs). In the past five years, Uninor has steadily increased its market share by providing Sabse Sasta consumer-relevant services for the mass market. In a hypercompetitive market like India, Uninor’s success has been riding on innovative products at affordable tariffs like the Sabse Sasta internet plan. This includes hourly, daily, weekly and monthly packs for internet-based services. The combo packs of Facebook and WhatsApp are driving internet usage on our network. Currently, almost 26 per cent of our customers are mobile internet users. Going forward, Uninor is planning to introduce more internet-based services at affordable tariffs. The company is also targeting 50 per cent of its users to be internet enabled by 2017.

However, Uninor also realises that mere products and services are not enough to drive consumption. The lack of awareness about the benefits of mobiles, and the fear of technology and safe internet usage patterns have been restricting mobile adoption. To promote digital literacy, Uninor has launched awareness and education programmes through Grahak Shiksha Kendras (GSKs) and Internet on Wheels. It launched over 200 GSKs or customer education hubs in its six operating circles. The plan is to have 500 such stores by the end of this year. These GSKs act as knowledge and awareness centres where existing and potential customers can walk in to get information related to mobile and internet services as well as resolve queries regarding the use of mobile phones. We have also launched the Internet on Wheels concept wherein a van travels across the circle to reach out to a wider audience and educate them about the benefits of mobile internet. First-time users can also get an experiential internet pack to increase their understanding of the internet. All this is being done to prepare our customers for more internet services and a digital era.

The company did not acquire airwaves in the last round of spectrum auction. How does it plan to expand and compete with limited spectrum?

In the recent auction, the incumbents were bidding to save their business. The fight for survival coupled with the limited amount of spectrum made it difficult for new operators to participate meaningfully in the auction. We hope that in the forthcoming auction, the government will release more spectrum bands in order to help its Digital India mission to take off. The absence of a spectrum roadmap makes it difficult to create a viable business plan for the future.

Uninor is working consistently to resolve the spectrum challenge so as to remain competitive and relevant in the market. While there is lot of buzz around the internet, around 600 million customers are still without an internet-enabled phone. In our markets, we still see voice dominating consumption. However, the internet is also catching up and this is where every operator is feeling the pressure on the spectrum front. It is a fact that the average spectrum holding in India is among the lowest in the world. Even though this has fostered innovation to maintain the quality of service delivery, we need more spectrum to meet future demand. As a part of the Telenor group, Uninor will continue to scout for new technologies and services to take forward our Internet for All strategy. We will bring our global partnerships and innovations to a growing market like India in order to serve our customers better.

Uninor claims to have undertaken the country’s largest and fastest network expansion in the past year. How do you plan to leverage this infrastructure going forward?

The 5,000 site expansion in 2014 will help us go deeper and wider in our network coverage. This will bring us closer to our customers and enable better quality of service, allowing more people to benefit from the Sabse Sasta offerings. Going forward, our focus will be on continuous improvement on the network side and on offering relevant services to our mass-market consumers. We will prepare ourselves for the latest technologies without compromising on efficiency. Every move we make will be aimed at serving our customers better and earning their trust and loyalty. We have our ear to the ground and will expand our product and service portfolio to meet the market demand.

What are Uninor’s views on spectrum sharing and trading?

In a spectrum-starved country like India, clarity on sharing and trading of frequency airwaves helps in business planning. Globally, no other market is as competitive as India and the quantum of allocated as well as available spectrum is putting pressure on telecom operators. A well-defined spectrum roadmap provides clarity on spectrum auction, reframing, sharing, trading, etc. This brings predictability into the system and helps drive teledensity.

What is the company’s target for the next few years?

Maintaining a strong growth trajectory in the telecom industry will be Uninor’s main priority. We will continue to make investments in the business in order to stay relevant, improve our operations and grow profitably. We will take forward our three strategic ambitions – “Internet for All”, “loved by customers” and “efficient operations” – to deliver on our growth aspirations and value creation, and build on our strong retail network.

The data opportunity in India is undeniable. Like voice services, the internet too has tremendous potential for basic services for the masses. This is the segment that will truly explode and contribute to the Digital India mission. This segment of customers is not concerned about what generation of technology they are using; rather, they are looking for affordable and relevant services. We have managed to convert 26 per cent of our customers to internet users on our 2G networks since Uninor launched the Sabse Sasta internet offer and combo packs for WhatsApp and Facebook. However, this success does not mean we are restricting ourselves to what we have been doing till now.