Uninor, the joint venture between Norwegian group Telenor and India’s real estate firm Unitech, launched its GSM mobile telecom service across seven circles on Friday in an already crowded market. It’s the14th telco of India, perhaps the only country with those many players. Many more players are waiting to launch their services shortly.
Although Uninor argued that tariff was not the only feature to attract subscribers, it too is offering `value for money’ schemes. It has not copied the per-second billing like the rest, but has in fact taken the tariff war a step further by offering a 29 paise per minute (less than half-a-paisa per second) plan, and by charging less for talking more etc!
The wireless subscriber base is around 488 million and total user numbers are at 526 million in India, and the teledensity is yet to touch 50%. That is the primary reason why foreign telecom companies are so keen to enter India despite the tariff levels touching a new low. Most western countries have already reached the saturation point in terms of phone subscriber numbers, with very little room for further growth.
The latest entrant in the Indian telecom sector has already set long-term goals. At a press conference to announce the launch, Unitech Wireless managing director Stein-Erik Vellan said that Uninor (the brand name for Unitech Wireless) would target an 8% market share by the year 2018. He refused to elaborate on the actual subscriber number that Uninor is aiming for.
As for the upcoming 3G auction, scheduled to begin on January 14, 2010, company officials were non-committal. “We are watching and evaluating the situation,” Vellan said.
“Per-second billing is not the only feature that subscribers are looking at,” president and CEO of the Telenor group Jon Fredrik Baksaas said. But the company has focused on varied tariffs for different needs—for instance talking longer, and making many calls. The two tariff plans are called ‘talkmore@29p’ and ‘callmore@29p’.
Talkmore offers customers local calls at 29 paise per minute and STD at 49 paise per minute, with a call setup fee of 39 paise. Callmore offers locals calls at 29 paise and STD at 49 paise per minute, with a daily rental of Rs2.
Uninor, which launched in Tamil Nadu, Kerala, Uttar Pradesh East and West, Karnataka, Andhra Pradesh and Bihar, has a pan-India licence, and wants to launch several other circles next year. The next big launch is expected in March. It has said that it would be Ebitda breakeven in three years and operational cash flow breakeven in 5 years.
Norway is the biggest market by volume for Telenor. In Asia, Thailand is the largest for the group in terms of revenue.
About regulatory concerns in India, Baksaas pointed at the spectrum allocation framework that is now being reviewed. On whether he expected consolidation in the market, he replied in the affirmative but refused to elaborate.
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