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Anil Sardana, who joined Tata Teleservices Limited (TTSL) as managing director about two years ago, has been instrumental in driving the company's growth through initiatives such as the strategic alliance with NTT DOCOMO, the launch of GSM services under the Tata DOCOMO brand, and innovative tariff plans. In an interview with tele.net, Sardana talks about the opportunities in the Indian telecom market, the challenges and the future growth strategies...

How has year 2009 been for TTSL?

In mid-2009, we unveiled our GSM brand, Tata DOCOMO and, a fortnight later, launched GSM services beginning with south India. In the few months since, Tata DOCOMO's GSM services have been launched in eight circles.

The government has brought in greater clarity on 3G by announcing the reserve price for spectrum and deciding that of the five blocks available, four will be auctioned to private players. We are looking forward to participating in the auction. Here again, our tie-up with NTT DOCOMO gives us a very strong footing and we plan to leverage DOCOMO's expertise to get the firstmover advantage in the 3G arena.Moreover, as TTSL has next-generation networks (NGNs) which are 3G ready, it is well positioned to move to the market fast.

How has the alliance with NTT DOCOMO benefited TTSL?

Second, DOCOMO is very good at value-added services (VAS), both in terms of applications and handset designs.We have created a peer exchange arrangement with DOCOMO and have set up a Business and Technology Coordination Council to identify the key areas where we can work together. VAS has been limited in the Indian market, which is why there hasn't been any slip in the voice segment. About 90 per cent of traffic in India is voice based. If one removes SMS and the internet (through wireless downloads), VAS will account for just 2-3 per cent of the market.

What has been the response to the aggressive rollout of GSM services? What is the road map for this segment?

As for future growth, the immediate objective is to launch pan-Indian services and, along with our partner NTT DOCOMO, redefine the telecom experience, taking the phone from being a communication device to a lifestyle enhancer, and thereon, to a behavioural assistance device.

What are the thrust areas for the company?

What is the biggest challenge that the company faces today?

Though the regulatory regime has kept pace with telecom growth, the industry continues to grapple with some burning issues, the most important being spectrum allocation. Almost 15 years after the telecom space was opened up, we are yet to have a comprehensive and technology-neutral spectrum policy to provide a clear growth path. Such a policy is an imperative, as it will help service providers to formulate their business plans based on a consistent regulatory framework, thereby increasing the inflow of investments in the sector.

The policy of subscriber-linked spectrum allocation is unique to India and the root of many controversies. It is well documented that this formula is flawed as it gives undue advantage to certain operators and can be easily manipulated. In fact, the inconsistent level of spectrum allocated to some operators –­ for the same number of customers –­ shows that there is no way spectrum can be balanced in proportion to the number of users. This remains a challenge, and we look forward to greater clarity and predictability from the authorities.

What has been the response to Tata DOCOMO's new tariff options like the one-second pulse? In what other ways is the company planning to differentiate its services?

As far as differentiation of services and products is concerned, we will leverage on NTT DOCOMO's VAS strength to deliver unique and innovative products and services, like the recently launched i-channel, i-mode, m-wallet and i-concierge services, in the Indian market.

The BTTC, set up by the two companies with very senior-level representation, meets once every two months and charts out the product and services road map.Thereafter, the engineers on both sides take over, creating and customising products and services to suit the Indian market and telecom palate. DOCOMO is the world leader in VAS and TTSL understands this market very well together, we will make a potent potion to serve out to our customers and give them a neverbefore telecom experience. 

As for the other initiatives, TTSL is living up to its stated goal of offering unique propositions to the Indian telecom user. Even with Tata Indicom, we did that with the launch of the "pay per call" scheme, using which subscribers need not worry about the length of the call any more; they pay for the number of calls they make regardless of duration. This scheme will continue, and we will step up our efforts to continue being a game-changer in the Indian telecom space.

What is the level of investment planned for the next two to three years?

We are looking at investments of around $2 billion for our GSM rollout. This includes investments on any upgrade or expansion that our existing pan-Indian CDMA network may require.

However, with the government having recently kick-started the 3G auction process, we are looking very closely at our GSM network rollout architecture. We, along with NTT DOCOMO, have designed our network to be NGN based and therefore 3G ready. In 3G, each base transceiver station (BTS) will be able to transmit almost double the number of erlangs that a 2G BTS can, which means that half the number of towers can accommodate the same number of subscribers. With extrapolation, this means that the capex requirements in the 3G domain would be reduced by a great extent.

We eagerly await further clarity on the 3G timelines so that we can tweak our GSM network rollout plans to optimise capex planning.

How is TTSL placed vis-a-vis the competition?

You should ask the competition that! On a serious note, as part of the house of the Tatas, our endeavour is to earn the trust and respect of our customers, our peers and the industry as a whole. I think that this is the true measure of success for any enterprise or any professional; the other side of success –­ the numbers bit –­ follows naturally. I am very optimistic about the future.

TTSL is a company with a huge customer base. What are some of the key characteristics of its customers? What makes them stay, and what makes them leave?

Customer segments in the telecom industry vary widely, depending on the personal needs and requirements from telephony. Usually, the prepaid segment is the prime mover as far as new subscriber additions are concerned. This has been a predominant trend in the industry, and shall continue to be so with over 90 per cent of the overall subscriber base in the Indian telecom market coming from the prepaid segment. The key reason behind the predominance of prepaid services is that the Indian mobile phone user likes to be able to control his expenditure.

The only way to cater to the diverse set of customers is to provide differentiated and tailor-made products and services. Thus, we offer end-to-end products and solutions across the telecom domain –­ be it top-of-the-line, cutting-edge solutions for our enterprise customers; highand midrange smartphones for high-net-income users; mid-range solutions like the Walky Talky for post-paid users; or VLE handsets for many of our prepaid customers, particularly those in rural areas. The service quality remains the same across all segments, thanks to our pan-Indian NGN.

As far as customer retention is concerned, the obvious answer is service satisfaction. The receptiveness of telecom companies to customer queries and other issues is another important factor. Quick action on queries and prompt redressal of grievances are some of the basic factors which have an impact on the customer's decision to leave or stay. At TTSL, we have always tried to take customer satisfaction to the next level. As a result, we have consistently fared very well in third-party independent surveys and market reports.