During 2015, data services continued to be central to Tata Teleservices Limited’s (TTSL) growth strategy. The operator introduced several customer-centric product and service updates to ensure subscriber retention, while simultaneously making significant investments in network upgrades. Elango Thambiah, president, mobility, TTSL, talks about the company’s focus areas and growth plans…
How did the company’s mobility business perform in 2015?
TTSL continues to be an innovator in the telecom market in India. We have taken several measures to enhance operational excellence and efficiency, which has helped us double our operating profits to 19 per cent in the first six months of the current financial year.
We continue to invest in spectrum and infrastructure to support our expanding subscriber base and the gradual shift towards increased data usage. With an investment of approximately Rs 80 billion in the last auction, TTSL has acquired additional spectrum in the 800 MHz band in the Delhi, Haryana, Mumbai, Maharashtra and Andhra Pradesh circles, and in the 1800 MHz band in the Andhra Pradesh circle.
On the consumer side, our effort has been to focus on the quality of acquisition and better retention. While gross subscriber additions still remain a priority, TTSL is focused on revenue enhancement. We are concentrating on revenue enhancement in customer lifecycle management to segment the existing customer base and move them up the value chain for up-selling and cross-selling products and services.
In the past year, we have introduced a number of customer-centric product and service updates. We have made significant investments in network upgrades, with a focus on cluster profitability. We have come up with longer validity plans that are data-centric and enable consumers to choose them as per their usage patterns. We continue to promote data usage not only in metro cities but also Tier II and Tier III towns through various value-added services.
Being EBITDA (earnings before interest, taxes, depreciation and amortisation)-positive, we have chalked out our roadmap for becoming cash positive. We have invested in setting up around 4,000 additional cell sites in 2015 to expand capacity and spruce up service quality. This has helped us enhance our 3G network in the rest of Maharashtra, Uttar Pradesh (West), Upper North, Karnataka and Kerala; enter new towns in these circles; as well as expand the 2G network in the semi-urban and rural markets of Andhra Pradesh and Tamil Nadu.
The distribution and retail footprint has been further strengthened with significant investments in expansion and customisation for subscriber segments. We are already the market leaders in large-screen data with our Tata Photon range of devices having a revenue market share of 40 per cent. We are consolidating our position in a market that uses multiple devices.
As an integrated technology specialist, TATA DOCOMO has moved beyond providing traditional voice and data services. It now provides solutions across information and communications technology, the internet of things (IoT), cloud and mobile applications to enterprises while bringing leading edge public Wi-Fi, data connectivity and mobile payment offerings to consumers through our product, m-Rupee.
What are the key emerging mobility trends in India’s telecom market?
- Digital disruption: We are in a period where digital technologies are reshaping relationships between customers and companies and blurring boundaries between industry sectors. However, research suggests that digital disruption and the need to prepare for it are still not receiving direct attention at the board level. Digital disruption is not just a buzzword; it is here to stay. In 2016, we will see the trend of transitioning from traditional methods of managing the business to getting real-time analytics in every aspect of the business and becoming part of the mainstream.
- M-payments: In India, there are over 100 billion mobile subscribers who use some form of mobile money and payment applications. Whether it is customer convenience and lower costs per transaction for urban customers, or the safety and ease of transactions offered to the unbanked and under-banked rural populations, m-payments are only bound to grow.
- Public Wi-Fi: The growing popularity of public Wi-Fi is largely because mobile devices have become the number one information source for receiving and sharing everything from current affairs to celebrity gossip, and public spaces have become fundamental to this trend. Visitors at shopping centres, railway stations, sports stadiums and other public spaces consider Wi-Fi access in the same way as air-conditioning or lighting, i.e., simply a given. Airline passengers are no exception. Travellers have their own “magic hour”, which they use to check mails, access flight information and browse the web before boarding flights.
- Wearables make IoT real: As predicted by Gartner, IoT will result in approximately 26 billion connected units by 2020. The revenue generated with respect to IoT products and services will cross the $300 billion mark, providing a plethora of opportunities for organisations across sectors. To lead this change, individuals and enterprises will have to fasten their hold on open standards for improving device monitoring and management, big data information gathering and analytics, and overall network communications. Wearables are also growing in importance as mobile commerce gains greater acceptability among consumers.
- Mobile and cloud: After growing at an exponential pace in 2015, cloud computing has become an integral part of the enterprise business strategy. Large global multinational firms are now looking to cloud to offer better front-end customer service and also fully leverage advances in back-end manufacturing.
In a world with connected devices, where data resides in the cloud, mobiles are ideally placed to track the business outcomes most critical to them. Today, businesses no longer debate whether cloud and mobile analytics will work together; it’s about how these two key trends can be merged to create a seamless unified business management tool.
- Smart connectivity means green connectivity: Mobile companies are looking at reducing their carbon footprint and improvising services in this regard. Enterprises are currently involved in introducing options like green data centres for customers.
At TTSL, we stand true to the social responsibility credentials of the Tata Group. Growth is inextricably linked to the well-being of our ecosystem: employees, business partners, local communities and the environment. To us, sustainability is not an option but an ethical imperative. We believe that green telecom is not just environmentally responsible but also sensible for business. This trend is most likely to spread over other sectors like smart clothing, watches, phones, smart buildings and smart cities with environment-friendly elements.
How has the data services ecosystem evolved in the country? How has the uptake of TTSL’s data services been so far?
India’s telecom sector is entering a new phase of growth on the back of rural expansion and an uptake in data services. Given customers’ momentous shift from voice to data, there is increased pressure on operators to provide higher bandwidth. All these will increase the demand on back-end infrastructure to offer hassle-free and rich quality network to end-users.
Understanding this need, TATA DOCOMO is continuing to create products that suit customer requirements. Our products and services have been appreciated for their quality and technological advancement. The introduction of the Photon Max 3G Wi-Fi device in the market brought about a mobility revolution for large screen data in the country.
We also understand that millennials constitute over 50 per cent of the Indian population. They have a different affinity with mobiles and depend on them for socialising, entertainment, shopping and banking, etc. We will continue to make data offers to match their requirements with innovative value additions and content partnerships.
What steps is the company taking to enhance its data service reach?
TTSL keeps customer centricity as one of its most crucial core values while developing products and services for ensuring customer delight and satisfaction. We come up with tariff plans and products that fulfil customer aspirations and demands, backed by a seamless network and diverse offerings for large screen, smartphone and feature phone users in the country.
“We remain committed to providing value for money, whether it is innovating in our plan offerings or investing in network efficiency and reliability.”
What are your views regarding 4G service growth in India in 2016? How are 3G services likely to be affected by the mass adoption of 4G services?
We believe that the Indian market is large and diverse enough to sustain different generations of technology. There is room for everyone. The fact is that whether it is 2G, 3G or 4G, all these technologies will co-exist. The relevance of existing technologies in providing cost-effective voice and data solutions to urban and rural consumers cannot be undermined.
What are the key issues and challenges being faced by operators?
Going forward, the lack of infrastructure in semi-rural and rural areas could be a major hindrance in tapping the huge market potential. Service providers have to incur massive initial fixed costs to enter rural areas. Many areas lack basic infrastructure such as road and power, which makes developing telecom infrastructure involve greater logistical investments and extends service roll-out times. The lack of trained personnel to operate and maintain cellular network, especially passive infrastructure like towers, is another hurdle in extending telecom services to under-penetrated rural areas. Given these imperatives, providing better services at competitive prices will remain a challenge for telecom companies.
What are the company’s growth and investment plans for the near term?
In line with our business strategy, an investment of approximately Rs 80 billion was made in the last spectrum auction. We continue to invest in infrastructure to support the growing needs of our consumer base. Our future strategy is based on growth and innovation, while keeping customer centricity at the core. We remain committed to providing value for money, whether it is innovating in our plan offerings or investing in network efficiency and reliability.