It’s been seven months since Vivek Sood took over as the CEO of Telewings Communications Services that offers mobile services in six circles under Uninor brand. Uninor with 45 million subscribers is the only operator that is focused on 2G space alone. In an interview with Anup Jayaram, Sood elaborates on the way forward for Uninor. Excerpts:
Uninor has been focusing on 2G services. With other operators offering 3G and 4G services, how do you compete in a data-driven market?
We are a mass market operator and offer services at an attractive price. There is still a big voice market in the mass segment and scope to increase reach in Bihar and Uttar Pradesh. According to studies, more than 50% people do not know the difference between 2G and 3G services. We run a lean, mean machine. In basic services, we were late, but over the last two years, we have gained share and strengthened our position. We are extremely rational and did not participate in the 2010 3G auction. It took 2-3 years for that spectrum to mature. There is a right time to do things, so buying spectrum without a network ready to deliver services does not make sense. It’s a matter of timing and opportunity.
How would you compete if an operator starts offering free bundled voice services?
That time is nowhere closer. While there is an opportunity to monetise data, about 85% of revenues and investments of operators are on voice. To offer free voice in such a situation is not easy. In UP, about 23% of our subscribers use a Rs 5 sachet for voice. It could be a risk, but not for now.
What challenges are you facing?
The demand for data services is rising and we need to be ready for that. But we don’t see it posing a big challenge over next 18-24 months. We need to prepare ourselves as an organisation to offer broadband services. That involves acquiring spectrum and building network. We also want to be better spread. However, we see India as 22 countries.
So, it’s not necessary that we have to be pan-India. If the right opportunity comes our way, we’ll look at it.
Uninor did not bid aggressively in the auctions earlier this year…
Though we participated in the auction, we were competing against operators looking to retain spectrum. Since we have enough GSM spectrum in our six circles — 5MHz to 7.2MHz — we do not need more. We would need spectrum to offer higher technology, but this auction was more for retaining spectrum.
You acquired spectrum in Assam in 2014, but are yet to launch services…
We need some regulatory clearances in terms of wave access before we can launch. Once the regulatory part is cleared, we will be ready to launch.
How are things changed in last two years ago?
Two years ago, we went through the process of spectrum repurchase. We now focus on basic services for the mass market in our six circles which cover 600 million people. Last year, we grew 28% year-on-year. This year we are doing better. In 2013, we took a conscious decision of being cheapest (cheapest), be it voice, SMS, value-added services and internet. That helped us to be the most affordable service provider. To do that we look at keeping cost of operations under control.
What all steps have you taken to keep costs in check?
We don’t complicate our offerings. Our IT stack, billing stack and network are meant for mass markets. We don’t have layered on costs attached to it, for example, our cost per minute would be lower than competitors. That’s the model we have adopted.
What is your take on M&A in the sector?
From a 14-operator market in 2012, we are now down to 8-9 operators. In some circles there are 4-5 operators. If you go circle by circle, it’s a 5-6 operator market. We don’t think a 5-operator market in India is high; 5-6 operators in a circle is workable. After all, this is a $ 30-billion market, which will be a $50 billion over the next five years. So, operators can find their own place.
