What have been TTSL’s milestones in the past one year?
The year began with TTSL showing the benefits of two years of careful planning, re-aligning its business strategy and streamlining its processes to prepare for a leaner future. The year saw the signing of TTSL’s strategic alliance with Japan’s NTT DOCOMO, which promised to bring in significant shortand long-term strengths to our company. We hived off our tower business with an agreement between our tower arm Wireless TT Infoservices Limited and Quippo Telecom Infrastructure Limited in a reverse swap deal.The WTTIL-Quippo combine is the largest independent tower company and has the highest tenancy ratios in the industry.
In mid-2009, we launched GSM services under the brand name TATA DOCOMO, beginning with southern India. These services have been launched in 18 circles so far, and we expect to complete the national rollout by the end of this financial year. It has been heartening to see the tremendous faith shown by our subscribers, and while the numbers speak for themselves, a far bigger validation is the entire industry following in our footsteps and introducing a per-second pulse, a TATA DOCOMO move that has proved to be a game-changer.
I am happy to report that we will become EBITDA positive soon in the first few circles where we launched services in southern India. This will be a record of sorts in the Indian telecom industry and goes to show that a large number of our new subscribers are high-ARPU individuals, who are discerning customers looking for differentiated services. It is also heartening to note that 45 per cent of the new subscribers on the TATA DOCOMO network have enabled GPRS on their connections and are healthy data users, thus accounting for higher ARPUs. I am also happy that our older CDMA service, under the Tata Indicom brand name, is now cash positive. This augurs well for our overall balance sheet.
Now, with the government bringing in greater clarity on the 3G front, we have geared up for the next wave in Indian telecom. Here again, our partnership with NTT DOCOMO puts us on a very strong footing, as our Japanese partner is the technological leader in this space globally. We look forward to leveraging NTT DOCOMO’s expertise to get a first-mover advantage in the 3G arena. Add to this the fact that our infrastructure comprises next-generation networks and is, therefore, 3G-ready. We are well positioned to take to the market fast.
What is the single biggest challenge that the company faces today?
The Indian telecom space has evolved into a competitive landscape where only the fittest survive. Sadly, success is dependent as much on the efforts of the operator as on external issues that shape the very environment the business functions in. In such a scenario, it is imperative that the government brings in regulations that spur the growth of the sector.
Where does TTSL stand vis-a -vis other operators?
You should ask the competition about that
How is the expected launch of 3G services likely to change the market dynamics for operators?
World over, 3G services have redefined the telecom experience for subscribers and the growth has been stupendous. Industry estimates suggest that the 3G subscriber base will reach a whopping 540 million worldwide in 2010. This is because 3G holds the potential to transform a mobile phone from a mere communication device to a lifestyle assistance and enhancement tool. The success of any service, however, depends on how it is taken to end-consumers and what value it adds to their daily life.
The Indian mobile phone market is the second largest and the fastest growing in the world. Initially, of course, voice and internet access will drive the growth in the urban market for 3G service, but subsequently, the rural market will also offer potential for services like m-commerce and mobile banking. For success in 3G, service providers are betting on their vast experience and understanding of consumer requirements.
What are your 3G and investment plans?
As a growing telecom operator, we have always received great support and tremendous interest from both domestic and foreign lenders. It is important to highlight the strong lineage TTSL enjoys, of both the Tata Group and NTT DOCOMO. Lending institutions are continuing to extend support to the sector. As for 3G uptake, it will be determined not by pricing but by the repertoire of services, ease of use and relevance to the target group.
What trends do you foresee in the Indian telecom sector over the next two years?
3G will provide a growth impetus for operators, ushering in the next level of communications. That’s because the 3G promise goes beyond high data transfer speeds. It enables service providers to achieve significantly improved spectral efficiency as 3G networks have the capability to service a far higher number of subscribers than 2G networks.
With faster data speeds, 3G will support data-intensive services such as full-motion video streaming, video conferencing and high speed internet access on mobile phones and wireless devices. This will give a fillip to value-added services, opening up a world of customised applications that will cater to individual needs. Consequently, a plethora of high quality, low-cost voice and fun services will emerge. The triple play of voice, video and data communications will help bridge the digital divide, giving a much-needed access boost to unserved India.
What is your vision for TTSL over the next two to three years?
As already mentioned, we have partnered with one of the leading telecom operators in the world, NTT DOCOMO. From day one, we knew that the approach would have to be radically different and our focus would have to be on innovation. In keeping with the Tata Group’s philosophy of leading from the front, we launched TATA DOCOMO with an industry-changing ?pay-for-what-you-use “paradigm. Part of this offer was the industry-defining per-second pulse and the focus is to extend TATA DOCOMO’s unique advantage across India with the ongoing GSM pan-Indian rollout.
Our expansion plan involves two simple elements: to ensure that our network is one of the best in the industry (similar to our CDMA network, which has been rated as the ?least congested” for five straight quarters by TRAI); and to continue to liberate customers and be refreshingly different. We intend to do that by bringing in the best products and services to India and through innovation.
Our network architecture has been installed with support from our partner NTT DOCOMO. The bottom line is that TTSL stands for a seamless customer experience and now, with some clarity coming in on Chinese equipment imports, network expansion on both CDMA and GSM, which had been stalled for over six months, can begin again. We are all set to further enhance the quality of our network experience.
We hope to bring in more products from NTT DOCOMO soon. These include the hugely successful i-mode suite, m-wallet and i-concierge products. These services enjoy tremendous popularity in Japan and other parts of the world, and we may customise them to suit the requirements of Indian users.
The telecom space has turned into a resounding success story for the Indian economy. Going forward, we feel that the telecom sector will usher in the next revolution in the lifestyle space through constant innovation. The full potential of the mobile phone, however, has not percolated into our society yet. We have seen the mobile phone evolve from being merely a communication device to one that offers information access and life-impacting services. The next evolution in mobile telephony will come with the mobile phone becoming a tool for lifestyle enhancement and, indeed, behavioural assistance. This will take place with services such as video gaming, video conferencing, filtering, push-to-talk, comics and deco-mail, parental monitoring and home management. Advanced countries such as Japan have been using these services for years and we feel that their growing popularity can be recreated in the Indian market.
What is your wish-list to enable the sector to maintain its growth momentum?
With the 3G licensing process delayed several times, India is already behind other countries that have launched 3G services 9-10 years ago. Also, TRAI is already exploring the possibilities of 4G networks in India and of auctions as early as next year. Operators will need to make a choice keeping in mind the following:
- Invest one time in a technology that keeps pace with the rest of the world.
- A long-term solution with a reasonable time-frame for recovering investments.
4G technology with its inherent advantages over 3G provides an answer to this ?double trouble” for operators. With a definite need to reduce dependence on voice and provide advanced data services to customers with a better user experience to increase ARPUs, 3G as a technology has very limited to offer for the Indian market.
Deploying 3G technology in the near future in India would definitely improve the services being offered on the 2G/2.5G network such as faxing, email messages, web browsing, real-time navigation and basic multimedia. However, like 2G, the 3G network too was designed on technology that was originally intended to make voice calls. Since voice calls require sending significantly less data than surfing the internet does, 3G networks are simply not intended to handle the rapid transfer of massive amounts of data. Further, 3G has limitations of scalability. 4G networks, on the other hand, have been designed for internet communications, which entail transferring more data than voice traffic.
Further, the download capacity of 4G is expected to make the mobile phone a powerful tool for surfing the internet. Consumers are expected to start using their mobile phones to make voice calls over the internet, which is currently possible only through PCs with broadband connectivity.
