'The quality of customer care is appalling'

Charles Antony

Having worked with Motorola for 25 years in several countries across the globe, Charles Antony brings with him a wealth of experience in the field of telecommunications. When at Motorola, Antony rolled out telecom systems architechture for KDDIS in Japan, for British Telecom, Sprint, Korea Telecom, France Telecom and China Unicom. He has also spent time in reasearh and development and in customer product development.

Back in India as managing director of Tata Teleservices (Maharashtra) Limited (TTML), which operates in the circles of Mumbai, Maharashtra and Goa, he finds the quality of telecom services poor. In his first media interview, Antony spoke to Business Standard on his impressions of the market and how he sees it evolving.

How do the telecom markets of India and China compare?

Unlike India, China has not opened its doors to foreign private operators. Both the operators there are government-owned. Technologically, both India and China are at similar levels and in both countries landline facilities are poor, as is the rural network.

The growth of the cellular market will be faster in China than that in India because it is a more advanced country, has a matured cellular market, the per capita income is higher and the population is larger. The Indian market is more comparable with the Latin American markets, especially Brazil.

What are your impressions of the Indian telecom market?

The ministry of telecommunications has estimated the total subscriber base, including fixed line, at 200 million by 2007. In my view, the market will grow fast "� by about 2010 the teledensity should be 40 per cent, from around 8 per cent now. That sounds ambitious but it should happen.

But at the current level of operations and given the average revenue per user (ARPUs), profitability will become an issue for some operators and therefore, going forward, consolidation is a must. The frequent changes in the tariff "� which are unheard of anywhere else in the world "� will take their toll unless the system is really robust.

This is an industry where you need to invest constantly and constantly migrate to newer technologies "� if you can't, you are out of the picture. Perhaps we need to have equipment manufactured locally, so that costs are kept in check.

What is your assessment of the quality of the products and the service?

In terms of technology, we are not too much behind and the voice quality too is not bad. But the quality of customer care is appalling. That is the biggest difference "� the service is bad. You cannot sell mobile services the way you sell soap or toothpaste and that is how they have been sold so far.

The cost of service is perceived to be high by the mass market thought the tariffs are one of the lowest in the world. The billing systems are in a complete mess and now we are in the recovery mode which is expensive.

Are customers in India very different?

In India customer loyalty is low since the market is driven by pre-paids. And there is virtually no brand equity. That is why the Tatas, who are late entrants, have a good chance of getting market share.

It is easier to get customers to switch to another service than, say, in the US. The quality of coverage in India is poor "� for instance six per cent of calls are dropped calls, whereas in Japan it's less than one per cent, but customers don't complain.

Indian customers are more tolerant of the quality of network services, which is yet to come up to par with those of global operators.

How do you differentiate yourself in this market?

The technology is more or less similar across operators, though we have an edge in some products and services. And price is a non-issue because it's not under anyone's control, it's a given. The biggest differentiator is customer care "� if you have that you are a winner.

Which segments are you targeting?

Since we are somewhat behind in the mass market being a recent entrant, we are looking at a combination of the rural and enterprise segments. Except for Bharat Sanchar Nigam Ltd, no operator appears to be focusing on rural markets. It's not easy because capital expenditures are high and the ARPUs there will be much lower.

But, since agriculture contributes significantly to gross domestic product and since there is over 6.5 lakh km of fibre, we believe there is potential.

Moreover, the teledensity is just 1.7, so there is an opportunity. Again, even in the enterprise segment, no player has been very aggressive. We hope to offset the lower ARPUs from the rural areas with the higher ARPUs from the enterprise segment "� we intend to offer end to end solutions rather than a vanilla phone product.

For example, our Push To Talk technology which is the only one of its kind in India., is killing long distance. We have sold our PTT phones even to the Reliance group.

What has been the performance of TTML in the recent past?

Our gross additions to the cellular subscriber base have more than doubled in the last three months to 1.12 lakh in December and our coverage should extend to 150 cities by March 2005.

The pre-paids, of course, are growing at a much faster pace. We are the market leaders in the fixed wireless phones segment. The landline business is growing but ARPUs are falling.

With STD rates having come down so sharply "� the last fall was around 12 per cent "� ARPUs will be under pressure. No increase in volumes can compensate for that kind of tariff drop.