 "Sunil Sood")
After showing some skepticism on fourth generation (4G) mobile technology last year, India’s second-largest telecom operator Vodafone has entered the fray with its next generation high-speed data services. It launched 4G services in Mumbai on Wednesday, after rolling it out it in four other circles, where it is the leader.
Vodafone India's chief executive & managing director Sunil Sood talks to Malini Bhupta about the impending data war and what it is doing to defend its leadership position. Edited excerpts:
Mumbai is a critical market for Vodafone as far as data subscribers are concerned. How are you looking at defending your leadership position in this market?
Our 4G service would provide a fabulous data experience both in your house, car, train and office. That is key. We need to provide streaming video content capability without buffering. Our price is fabulous as it is the same as 3G. For our 'Red' customers we are offering 100 per cent extra data for free by changing the SIM. We are also providing content through Vodafone Play, which is an app, where you can watch television while you are on the move. We are offering HD video and voice. We are also offering international roaming services to our 4G customers, which is a first in India.
How different will your service be from competitors because consumers as rivals will go after your premium consumer segment?
We think we have launched our service with superior in-building experience. We have provided the best service in this city at the best value, which is why a majority of the customers have chosen us. If customer is happy with the service provider, why would you want to leave.
Customers may move for price, if your rivals offer lower prices? Do you expect a price war in data?
If there is a price war, we’ll take appropriate action. We cannot comment on players who have not launched yet. In the last quarter or so, prices have been weak, but I believe the market has started correcting. In January, prices have firmed up; so correction has already started happening. Competitive pressures have driven prices down as players lowered prices to get more customers.
Will voice continue to decline?
As a total percentage of revenues, share of voice will keep declining as more people use data. So, while the high-end customer was using 2,000-3,000 minutes earlier, that is coming down. But, this is a small segment. New customers are still increasing voice volumes. As income levels increase, voice users are also talking a lot more. The growth in voice services is slowing. But, has the voice service growth stopped? It has not.
Data growth has slowed even as 4G roll-outs are happening. What is the potential of India's data market?
It all depends on the ecosystem. In five years, only 30 per cent of my base has a 3G handset. Only four per cent of my base has 4G. So how fast will this move? There are barriers to growth. Potentially, the entire market can move to 4G. But, the entire market does not necessarily need 4G. Will the ecosystem change rapidly, yes it will. One year ago, we did not see the market 4G ready; today, we see the market evolving.
Do you have enough spectrum for 4G services or will you need to plug gaps?
All bands of spectrum are capable of 4G. You can use spectrum in the 700, 800, 2,100, 1,800, 2,300 and 2,500 bands to offer 4G services. So, we have spectrum to offer 4G. Do I want to increase my spectrum assets? I do not think we have enough spectrum. When we launched 3G on 5 MHz, we had to explain to Nokia and Ericsson that we have only 5 MHz so enable us to offer 3G services on this spectrum. This is a problem. We would love to improve spectrum assets. We have 5,000 sites for Greater Mumbai. Cairo and Giza (both in Egypt) have the same population. Vodafone in Egypt has 1,600-2,000 cell sites, so why do we have 40 per cent more sites? It’s because of spectrum shortage.
What is your view on the telecom regulator’s recommendations on auctions and the reserve prices?
We are happy with the fact that Trai (Telecom Regulatory Authority of India) has stated that all bands of spectrum should be available for sale. What we are disappointed with is the kind of price recommended. Trai has outpriced us on 700 MHz.
