Uninor says despite no 3G, data revenues same as incumbents'

Uninor India, the Indian arm of Norwegian operator Telenor, recently started making profits in its Gujarat telecom circle. The company, which achieved its first break even in UP (East) circle in December, ahead of target date, plans to turn profitable in all its circles by the year-end. Yogesh Malik, the newly appointed CEO of Uninor India,  informs Beryl Menezes about the company’s profitability despite having the lowest industry tariffs and free roaming, its plans to expand footprint, and more. Excerpts from the interview:

How has Uninor managed a break-even when several peers have not?
We took a decision on whom to serve – the mass market with basic services. To do that successfully, we knew we would need to be better than competitors in mass-market distribution.

This meant saying no to services that our mass-market customer doesn’t need and saying yes to low-cost innovations in retail and distribution. With UP (East) and Gujarat, we have shown how ‘sabse sasta’ can still deliver profitability if you know whom to serve with what, and have the ability to relentlessly challenge your own costs. By the end of this year, we will show this to be true in each of our circles.

Besides promotional offers and discounts, how does Uninor manage to add subscribers and maintain Arpus (average revenue per user)?
It is this position – of being the most affordable and reliable for voice calls, SMSes and basic internet – that has helped us gain subscribers in a hyper-competitive market. With our Arpus increasing to Rs 94 this quarter compared with `90 the previous quarter, we are already seeing this effect.

Given that most telcos today have steadily been removing free minutes and discounts, how does Uninor plan to remain profitable?
Raising tariffs as the only way to improve the bottomline covers up internal inefficiencies that an operator must continuously attack – and a customer should not have to pay for this. By solving our own shortcomings, we have now been able to make our cost per minute as much as 25% lower than that of incumbents. This allows us to be that much more cheaper in tariffs in the market, too.

What was the impact of Uninor shutting down its Mumbai operations?
We did lose a number of subscribers. However, we have now launched free roaming for all our subscribers in circles such as Maharashtra and Goa, Gujarat and others when travelling to Mumbai. This means no extra roaming costs to use your Uninor connection when you are in Mumbai.

What is happening on Uninor’s partnership with Lakshdeep?
In fact, this partnership is between Telenor Group and Lakshdeep to create a new company to which the Uninor business will then be transferred. As far as Uninor is concerned, we are keeping our focus on the goal of breaking even this year and expanding our footprint further in the six circles where we have fresh spectrum for 20 more years.

Any plans to start offering 3G? What is your take on 3G ICR roaming?
While data is the big story today, the majority of the market uses internet browsing, emails, music and basic VAS. For all of these, our newer and EDGE-enabled network delivers a good quality experience at ‘sabse sasta’ tariffs. This means, our percentage revenue contribution from data is not much different than that of large incumbent operators. However, given that our spectrum is liberalised now, we will be ready to expand our offerings when we see market demand.