India’s telecom network is the second largest in the world in terms of the subscriber base. To ensure affordable services to all consumers, telecom operators have introduced innovations like pre-paid tariff packages and business models such as network outsourcing. Further, the country has the third largest internet user base, which stood at over 137 million as of June 2012. Owing to intense competition and widespread network coverage, India has one of the lowest call tariffs in the world.
The Indian telecom industry has played a key role in narrowing the rural-urban digital divide and bringing about a socio-economic change. It has also increased transparency in governance, through the introduction of e-governance initiatives. Telecom services have been used to implement mass education programmes in rural areas and offer services like banking, ticketing and mailing through mobile handsets.
India is divided into 22 telecom circles, which are classified as metros, depending on their revenue potential. Gujarat is a category A circle with a cumulative subscriber base of 415 million (as per the Cellular Operators Association of India).
Moreover, economic stability in the state has helped attract large investments from both domestic international players. The investment inflow has paved the way for rapid industrialisation through the setting up of 30 special economic zones. This has facilitated the growth of the telecom, infrastructure and technology industries. Going forward, the Gujarat telecom market will continue to offer high revenue opportunities for service providers.
Telecom and IT have played a key role in enhancing work efficiency and public accessibility through e-governance measures. The state government has been increasingly using information and communication technologies to offer citizen-centric services, increase transparency and reduce the response time as well as service delivery costs.
Gujarat’s telecom market is the most competitive in the country with as many as seven operators in the circle. The entry of new players in 2008 intensified competition in the market, thereby resulting in more affordable tariffs. However, not all operators have witnessed significant growth. Factors like stringent regulations, hyper-competition in the market, and spectrum availability and pricing have impacted their progress.
Uninor in Gujarat
Uninor’s growth strategy in Gujarat focuses on mass market distribution and offering high-quality low-cost services. It was the first player to achieve break-even in the state in only three years. The company has maintained a steady subscriber base as well as revenue growth and has crossed the 5 million subscriber mark in the state.
Uninor’s focus areas in the Gujarat circle include basic services like voice, SMS and the internet, which are being availed of by nine out of every 10 users. A strong distribution network of about 50,000 points of sale and 213 brand stores is being used to deliver these services. Innovative products like the Rocket Recharge have helped attract retailers and customers.
Uninor offers a wide range of internet-based services in Gujarat. VAS services have witnessed high growth with the increasing availability and affordability of smartphones and other devices that support data services. The company’s success in Gujarat indicates that profitability does not directly depend on high tariffs or complex high-end services. Currently, the company is focusing on offering the most affordable tariffs to the mass market and supporting its growth plans in the state.