With 188.8 million wireless subscribers and a market share of 20.67 per cent (as of July 2012), Bharti Airtel is the biggest operator in the telecom space today. The company increased its competitive edge with the recent launch of long term evolution (LTE) time division duplex (TDD)-based 4G services in Bengaluru and Kolkata, making India the first country to commercially deploy this technology. In an interview with tele.net, K. Srinivas, president, consumer business, Bharti Airtel, talks about the customer response to its 3G services, its 4G plans and key focus areas.

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As a leading telecom player, how do you intend to retain your competitive edge?

While there is untapped potential in the voice segment in India?s large rural market, the next big thing will be data. Given that rural mobile penetration (not accounting for the dual-SIM card phenomenon) is only 38.5 per cent, there is significant scope for growth through network expansion in these areas. Considering the high cost of operation and infrastructure required for rural expansion, the mobile platform is the most efficient and effective medium for offering services related to financial inclusion, health and education in rural India.

According to a report by Cisco, global mobile data usage almost tripled between 2009 and 2010. The report forecasts that mobile data usage will increase 26 times by 2015, and the majority of this growth will be contributed by users who do not even have access to electricity. According to industry estimates, 6 per cent of all mobile connections will use 4G services by 2016, which would contribute 36 per cent to the total mobile data traffic. This, along with the fact that India has the world?s third largest internet subscriber base with over 100 million users and the second largest Facebook subscriber base with 43 million users, means that we are at the cusp of a data revolution. This revolution will be driven by the youth. With more than 50 per cent of the population below the age of 26, this customer segment has the capability of bridging the digital divide between the developed and developing worlds in terms of data consumption.

The Indian telecom industry has started witnessing growing demand for data products and services, with the increasing penetration of feature phones and smartphones. Smartphones and feature phones together accounted for about 43 per cent of the total phones shipped in the country in the second quarter of 2011-12, witnessing 51 per cent and 18 per cent year-on-year growth respectively. The number of smartphone devices in India is expected to witness a compound annual growth rate (CAGR) of 56 per cent from 11 million in 2010 to 100 million in 2015.

Bharti Airtel recently launched 4G services in Kolkata and Bengaluru based on LTE-TDD, making India one of the first countries to commercially deploy this technology. The Indian telecom market is poised for significant growth across sectors ? commerce, agriculture, education, governance and health ? on the back of voice and internet applications including mobile value-added services.

Providing affordable internet access to urban customers through broadband wireless will also be critical. In fact, internet-on-the-move is going to be a key growth driver for the industry. However, a supportive policy framework that encourages investments in the sector and ensures low pricing of spectrum will be crucial to achieving these objectives.

The following are Bharti Airtel?s key initiatives and business priorities.

m-commerce

The airtel money service was launched across India in February 2012 through our wholly owned subsidiary Airtel M Commerce Services Limited. It was the country?s first-of-its-kind mobile wallet service provided by a mobile operator. Available across 300 key cities, it is a fast, simple and secure service that allows users to load cash on their mobile devices and spend it to pay utility bills and recharges, shop at over 7,000 merchant outlets, etc. Also, Bharti Airtel has partnered with Axis Bank to provide banking and payment services to India?s unbanked millions through the mobile platform.

m-health

We have launched the Mediphone voice service for providing medical advice to customers on a pan-Indian basis in partnership with Religare.

Airtel business-to-business segment

This segment provides innovative business solutions to large and small enterprises, government customers and carriers across the globe. The data centre and managed service solutions include managed hosting, storage, business continuity, data security and cloud services. Our service portfolio caters to the needs of businesses across verticals including IT; IT-enabled services; fast moving consumer goods; banking, financial services and insurance; and media. Airtel Business also offers digital media services. Over the past four to five years, the company has invested over $500 million in next-generation cable systems. These investments support an integrated suite of global and local connectivity solutions across voice and data, including IPLC, Ethernet, IP transit, managed MPLS services, voice termination services and carrier outsourcing solutions.

Bharti Airtel has launched BWA services in Kolkata and Bengaluru. What are your future plans for 4G deployment?

Mobile broadband in India has grown steadily since the award of 3G licences. Currently, there are over 10 million HSPA connections in the telecom industry, and this is expected to grow by 900 per cent to over 100 million by 2014, making India the largest HSPA market in the world over the next two years (surpassing China, Japan and the US). As is evident from these figures, data will be the new growth driver for the Indian telecom industry. With a broadband penetration of around 1 per cent, wireless could be the only medium to connect people to the internet. Mobile data traffic is expected to witness a CAGR of 108 per cent (from 0.09 million TB in 2008 to 3.6 million TB in 2013). In the future, the majority of users will access the internet through a wireless device, and this is where 4G is expected to play a key role.

4G LTE will provide wireless internet access at speeds that are ten times faster than any wireless technology. 4G will also provide a thrust to new services in areas that have not yet been fully explored for wireless services in the fields of consumer electronics and appliances, health care, public utilities, etc. Airtel has taken the lead in launching 4G services in India, starting with Kolkata and subsequently in Bengaluru. We plan to launch 4G services in the Karnataka, Maharashtra (including Mumbai), Punjab, Delhi, Haryana and Kerala circles.

Broadband telephony offers a major opportunity, given its low penetration, which makes 4G a viable solution for areas where fibre is not available.

What has been the customer response to your 3G services?

With increasing 3G handset penetration, depth and availability of content, and network expansion, the long-term outlook for service adoption is positive. Airtel has rolled out 3G services in 13 licensed circles and the response has been positive. Today, we have expanded these services to over 1,100 cities and have over 9 million 3G subscribers. The data segment offers a major opportunity. The Indian market would have more than 1 billion networked devices in four years from now, as compared to 570 million in 2010. The high mobile internet potential is evident from the fact that several customers are using GPRS-enabled phones to access data. With the maturing devices market offering various pricing options for customers, 3G and 4G services are expected to gain momentum in the future.

How has Bharti performed in the rural segment? What are the key challenges?

Despite the strong sector growth over the past decade, rural mobile penetration stands at less than 40 per cent. While the wireline customer base continues to drop, telecom growth has been largely driven by the wireless segment. The wireless customer base stood at 919 million at end-March 2012. This segment grew by 13 per cent during the year, accounting for nearly 97 per cent of the total telecom subscriber base. The rural telecom penetration of 39.2 per cent (at end-March 2012) offers significant potential in terms of both adding customers and increasing usage. The urban potential is in terms of consumption-led growth (voice and data services), while rural areas offer opportunities in terms of volumes-led growth.