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Interview with Arvind Bali, Chief Executive Officer, Videocon Telecom

October 17, 2017

Interview with Arvind Bali, Chief Execut...

With growing competition in the Indian telecom sector, several regional operators have been compelled to diversify from their traditional businesses and explore new revenue streams and growth avenues. One such player is Videocon Telecom, which has exited its mobile business and forayed into several other technology-driven businesses that are synergic to its existing business lines. With a new strategy in place, the company aims to capture a sizeable share of the country’s growing enterprise communications market. Arvind Bali, chief executive officer, Videocon Telecom, talks about the company’s new focus areas and future growth strategies. Excerpts…

What are Videocon Telecom’s current focus areas and business lines?

Our current focus areas include telecom-related, non-spectrum dependent businesses on both the business-to-business (B2B) and business-to-consumer (B2C) fronts. On the B2B front, we are currently involved in the wholesale international long distance carrier business, enterprise communication solutions, the tower business, security and surveillance, smart home and smart city solutions, and the international call centre business.  On the B2C front, we have recently launched our own video surveillance CCTV solution, “Videocon WallCam”, and a smartphone accessories business, “Hi5!”

What was the rationale behind your recent foray into new business areas?

After exiting the telecom mobility business, we started scouting for new business opportunities to diversify into. The key for diversification was very clear: the businesses should be synergic with our existing business lines, they should not involve any capex, should be a growing market and be self-sustainable from the word go. The idea was to leverage our telecom, IT, research and development and after-sales service capabilities as well as our sales and distribution network and manufacturing infrastructure.

What is the current size and potential of the surveillance market in India? What opportunities is Videocon looking to leverage in this space?

The overall security and surveillance market in India is worth approximately Rs 66 billion. This includes video surveillance, which accounts for a 55 per cent share with Rs 36.5 billion. Of this, the retail CCTV market comprises 15 per cent at Rs 5.5 billion. The Indian video surveillance market is expected to register a year-on-year growth of 26 per cent to reach Rs 91.5 billion by 2021, the growth engine being the retail segment, which is likely to grow 3.5 to 4 times, that is, to Rs 19.5 billion-Rs 21 billion, by 2021.

Clearly, while this is a growing market, it is being served by only four or five organised players, thus giving us good headroom for growth. We see ourselves acquiring a fair market share among the organised players by 2019, and featuring in the top three players by 2021, with a turnover of Rs 11.5 billion.

How has the Indian enterprise communications market evolved over time?

The size of the Indian enterprise communications market, comprising communications solutions such as application to person (A2P) SMSs, toll-free solutions, outbound dialling/interactive voice response, PRI, missed call and short/longcode is estimated at Rs 16 billion. A2P SMS continues to dominate the market with the largest market share of 82 per cent. This old yet effective tool in mobile telephony still stands strong despite the evolution of technology from 2G to 3G and 4G. From being used only for peer-to-peer (P2P) communication, SMS is now being used for A2P messaging as well. While P2P messaging has witnessed a decline in the wake of the proliferation of data-led applications, which offer a better experience to users, the universal and ubiquitous service has found a new use.

How has been the performance of the company’s enterprise solutions vertical, Videocon Edge?

Looking at the potential of the market, we had set up the enterprise communications solutions vertical in 2016. The vertical has done fairly well and we have created a good funnel of enterprise and government sector customers. Being a new entrant in the enterprise communications solutions market, and considering that there are eight to nine players in the market, we are targeting a fair share of 12 per cent, or Rs 1.95 billion, in 2017-18.

What are the key emerging opportunities that you are looking to leverage in the enterprise communications space?

In terms of growth potential, the market is expected to grow twofold over the next few years. Currently, the Indian A2P SMS market size is about 180 billion SMSs per year, which interpolates to 13.5 A2P SMSs per subscriber per month (for 1.1 billion mobile subscribers). Interestingly, this is only about one-fourth of the average A2P SMS consumption of the rest of the world. So there is a huge potential for the business. We aspire to be the first choice of businesses and brands using the service. We will provide various industry-first solutions to our customers including beacons for proximity marketing and chatbots to create differentiation.

 
 

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