Reliance Communications (RComm), the first company to leverage on its dual networks?CDMA and GSM? has been at the forefront of bringing in the mobile tariff war in the telecom industry. It launched GSM services in eight of the 22 telecom circles with its CDMA services. For the remaining, the company launched its GSM services in January. The entry of the Tatas with a strategic billing plan in the same terrain has resulted in some fierce competition in the telecom market. FE?s Nikita Upadhyay spoke to Akshay Kumar, CEO and regional head?Mumbai, Maharashtra-Goa and Gujarat?about the company?s strategies to counter the competition in the western region, spectrum constraints and plans for the quarters ahead. Excerpts:
You are in a highly penetrated market and 2-G auctions are on hold. How do you see the impact on company?s western zone operations?
Mumbai is a highly penetrated market and we abide by the terms and policies of the government. We are building our infrastructure and network more robust to counter this impact. We already have the required number of subscribers and qualify for additional spectrum on the basis of subscriber-linked basis. We have appealed to the government and applied for the same. Spectrum constraints have been an ongoing issue in the telecom sector.
So it?s the entire industry is suffering the consequences of this phenomenon.
The Tatas have come out with their GSM service and are offering per second billing plan. How would you place yourself in such a competitive market?
I would not like to comment on other companies. As far as I know, our tariffs have been the lowest in the market. Many companies have also tried coming up with similar offers but could not beat our tariff model. We never initiated or entered a tariff war because we were the only ones having such low offerings. We have our basics right in place which is necessary for viable business in this market. We initially had created a buzz in the market with our GSM tariff plans. Every operator has a different strategy to enter the market. The key is how long does one sustain that model and retain customers by building a scalable business opportunity.
What are your views about the tariff war in the country?
As I said earlier, everyone has a different strategy. What depends is how the plan is communicated to the subscribers. In India, what also works is the word of mouth. We have been the first players in the telecom market to run GSM and CDMA technologies efficiently. We are not forced to bring down our tariffs based on other company?s plans. A higher ARPU generating subscriber does not look at the tariff but would look at the overall brand, network and services. If one starts following this pattern then the telecom business would run into losses. Future is consolidation and survival of the fittest.
What is the focus for the quarters ahead?
Value added a service (VAS) is the way ahead for sustaining good margins. We have engaging offerings to the ABC (astrology, bollywood, cricket) of VAS.
We are a global partner for all ICC events till 2015 enabling our subscribers with all ICC Champions Trophy matches, match scores, expert commentary, amongst others. We have a robust sales and distribution network, best network quality and greater number of touch points to interact with the customer. All this and more makes RComm a very strong group in its brand value which works as our advantage.