 "We're evaluating all options to secure a high-speed data play: Sharad Mehrotra")
The battle for 4G services is set to intensify, with Telenor India gearing up to launch the services. The company's Chief Executive Officer Sharad Mehrotra tells Mansi Taneja the firm's subscribers using data services, will double by 2017. Edited excerpts:
What are your plans to expand data services? What kind of growth are you expecting from India?
We expect a significant increase in demand for data services this year, with smartphone usage going up. Currently, 26 per cent of our subscribers use data services and we expect this to be 50 per cent by 2017. Our commitment on network modernisation will make us future-ready to launch relevant internet-enabled services. We are looking to launch 4G services commercially in India within six months. We have launched a pilot project in Varanasi and depending on its outcome, we'll launch 4G services in five to eight cities across our six circles. The test of 4G is being done with 1.4 MHz on a new technology called narrow-band LTE (long-term evolution). Though this is a short-term solution, we will need more spectrum in the long-run to deliver the right data experience to our customers.
How do you plan to expand your presence in India? Are you looking at acquiring a telecom company?
We're evaluating all options to secure a high-speed data play. However, DoT (Department of Telecommunications) is to give us a final view on spectrum bands available, timelines and final prices. Any telecom operator needs spectrum to deliver better customer experience. For Telenor India, there are three options available - auctions, mergers & acquisitions, and spectrum sharing and trading route. A team of experts is already looking into it. We see India as a growth market and believe in the opportunities in both voice and internet services - especially in the mass market segment.
Would you be participating in the upcoming auction? What are your views on auction of 700 MHz? Is the reserve price suggested by the telecom regulator too high?
Telenor India is a mass-market player offering affordable products. We'll continue with this strategy. We do not discuss spectrum strategy on bands. For the telecom sector, 700 MHz is the most efficient spectrum but the current recommendations have put the base price on the higher side. We'll wait for DoT's guidelines to decide our auction strategy.
What kind of investments have you committed for network upgradation?
We have invested nearly Rs 1,240 crore for modernising our 25,000 network sites, which will be completed by the first quarter next year. We have already completed the swap of 7,000 sites across our circles. Lean GSM will ensure optimal use of available spectrum improving network capacity by 30 per cent. Today, the majority of the mass market usage is served better with affordable tariffs using the 2G/EDGE (enhanced data rates for global evolution) platform.
What is the target for turning cash-positive in India?
In the fourth quarter of FY15, Telenor India witnessed a five per cent organic growth in subscription and traffic revenues. The year closed with 16 per cent higher subscriber base than last year and a revenue growth of 9.2 per cent over last year along with Ebitda (earnings before interest, taxes, depreciation and amortisation) narrowed down by 90 per cent to be at NoK (Norwegian krone) 47 million. We are a zero debt operator. We have set our plans to increase our customer base by 10 per cent in 2016.
Are you in favour of call drop compensation, as suggested by the telecom regulator, as you are the only company to offer free talk time in lieu of call drops?
We were the first ones to initiate voluntary compensation for call drops. Telenor India has taken steps to reduce call drops and strengthened efficiency by continuously investing in network infrastructure. We will abide by the regulatory and court orders.
Apart from free insurance, what other products are you planning to offer?
Our free life insurance product has positioned us as more than a telecom operator. Telenor Suraksha is now the world's fastest growing micro insurance product. Nearly 21 million customers have been enrolled and eight million have already been insured in less than 150 days.
We've taken out barriers in insurance adoption by combining mobile technology with insurance product. Depending on the success of this product, we have plans to offer a bouquet of insurance benefits to customers. We also want to take it to the next level by covering our on-ground sales team and channel partners.
What are your plans to expand data services? What kind of growth are you expecting from India?
We expect a significant increase in demand for data services this year, with smartphone usage going up. Currently, 26 per cent of our subscribers use data services and we expect this to be 50 per cent by 2017. Our commitment on network modernisation will make us future-ready to launch relevant internet-enabled services. We are looking to launch 4G services commercially in India within six months. We have launched a pilot project in Varanasi and depending on its outcome, we'll launch 4G services in five to eight cities across our six circles. The test of 4G is being done with 1.4 MHz on a new technology called narrow-band LTE (long-term evolution). Though this is a short-term solution, we will need more spectrum in the long-run to deliver the right data experience to our customers.
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We're evaluating all options to secure a high-speed data play. However, DoT (Department of Telecommunications) is to give us a final view on spectrum bands available, timelines and final prices. Any telecom operator needs spectrum to deliver better customer experience. For Telenor India, there are three options available - auctions, mergers & acquisitions, and spectrum sharing and trading route. A team of experts is already looking into it. We see India as a growth market and believe in the opportunities in both voice and internet services - especially in the mass market segment.
Would you be participating in the upcoming auction? What are your views on auction of 700 MHz? Is the reserve price suggested by the telecom regulator too high?
Telenor India is a mass-market player offering affordable products. We'll continue with this strategy. We do not discuss spectrum strategy on bands. For the telecom sector, 700 MHz is the most efficient spectrum but the current recommendations have put the base price on the higher side. We'll wait for DoT's guidelines to decide our auction strategy.
What kind of investments have you committed for network upgradation?
We have invested nearly Rs 1,240 crore for modernising our 25,000 network sites, which will be completed by the first quarter next year. We have already completed the swap of 7,000 sites across our circles. Lean GSM will ensure optimal use of available spectrum improving network capacity by 30 per cent. Today, the majority of the mass market usage is served better with affordable tariffs using the 2G/EDGE (enhanced data rates for global evolution) platform.
What is the target for turning cash-positive in India?
In the fourth quarter of FY15, Telenor India witnessed a five per cent organic growth in subscription and traffic revenues. The year closed with 16 per cent higher subscriber base than last year and a revenue growth of 9.2 per cent over last year along with Ebitda (earnings before interest, taxes, depreciation and amortisation) narrowed down by 90 per cent to be at NoK (Norwegian krone) 47 million. We are a zero debt operator. We have set our plans to increase our customer base by 10 per cent in 2016.
Are you in favour of call drop compensation, as suggested by the telecom regulator, as you are the only company to offer free talk time in lieu of call drops?
We were the first ones to initiate voluntary compensation for call drops. Telenor India has taken steps to reduce call drops and strengthened efficiency by continuously investing in network infrastructure. We will abide by the regulatory and court orders.
Apart from free insurance, what other products are you planning to offer?
Our free life insurance product has positioned us as more than a telecom operator. Telenor Suraksha is now the world's fastest growing micro insurance product. Nearly 21 million customers have been enrolled and eight million have already been insured in less than 150 days.
We've taken out barriers in insurance adoption by combining mobile technology with insurance product. Depending on the success of this product, we have plans to offer a bouquet of insurance benefits to customers. We also want to take it to the next level by covering our on-ground sales team and channel partners.