Established in 2010, New Call Telecom has been providing fixed-line, broadband and mobile phone services to a customer base of over a million annual subscribers in UK. Recently, with the acquisition of the India-headquartered Nimbuzz, an over-the-top (OTT) messaging application, the company has mobilised its efforts in the Indian telecom space as well. New Call Telecom believes that the business environment in India is positive, especially with the government-driven broadband initiatives. Nigel Eastwood, CEO, New Call Telecom talks about the latest trends in the Indian telecom space and the company?s strategies to turn these into growth opportunities…

What guided New Call?s decision to foray into the Indian telecom market?

With India preparing for the next level of growth through ambitious projects like Digital India by 2019 and 100 Smart Cities by 2022, the Information and Communications Technology (ICT) industry in India, as well as sectors like agriculture, banking, education, and healthcare which will leverage ICT to improve service delivery, is set for the next level of growth. The small and medium businesses (SMBs) in India, a major contributor to the Indian GDP, also will gain immensely from these initiatives.  Once accomplished, these projects will make the ?Networked India? concept a reality by eliminating the digital divide between the urban and rural population and enabling service delivery through digital channels.

There is an absolute need of a broadband operator focused on SMBs, since all telecom operators are focused on big enterprises. The SMB segment needs a robust broadband network that provides services as per their needs. We are addressing the market and looking to partner with a company that targets the need in the space and address the problem in terms of connectivity.

The fixed line infrastructure in India is may be five to ten years behind UK and the western countries in the SMB segment. We hope to rollout applications, developed by Nimbuzz (our first acquisition in the Indian market), to address the needs of small business users in terms of connectivity and enabling e-commerce for them.

New Call is in a unique position to create next-generation internet operation. We find ourselves in a space where we have got huge interest in the business. We are developing an application ecosystem with consumers in mind and are developing applications that answer the problem in the telecom internet space. We are also looking at opportunities such as Big Data and Money Transfer to complement the internet-centric play in the country.

How has your experience been so far?

With over 750,000 annual subscribers, New Call Telecom today is a price leader in the UK residential telecom market through its brands Primus Saver, which offer phone and broadband packages, and Planet Talk, Just Dial and Rate Buster, the low cost international calls services. We have had presence in India since our inception in 2010 but have now propelled our direct focus in the telecom market here. Our short term vision in India is to capture the massive opportunity that the telecom sector presents, surrounding data transit, usage manipulation, and streaming; where ever possible collaborating with other incumbent telecom operators and generating completely new revenue streams in the sector in India by identifying synergies across a number of different existing businesses.

We are looking at an ecosystem for over-the-top (OTT) broadband services in the country, leveraging the existing service provider infrastructure with revenue sharing through various innovative business models by identifying synergies across a number of different existing businesses. Our first acquisition in the country has been of the mobile messaging powerhouse Nimbuzz with 200 million registered users. We are also exploring the e-commerce segment in the country going ahead. Under our medium to long-term strategy, we would be looking at building synergies around our different business areas involving data analytics and e-commerce, thus, developing a unified communications platform.

During 2015, the New Call Group of Companies is targeting a $200 million run rate in revenues globally and India will contribute nearly 35 per cent to this pie through our strategic acquisitions. In the coming five years, we see ourselves as a well-established international unified communications brand in India.

What are the key challenges that the company is facing in the Indian market?

We are currently in the process of identifying the right long term partners as per our growth roadmap. It is  a challenging task considering the high level and multitude of entrepreneurship talent in India, especially in the technology space. We?re also looking forward to the support of the government and the regulatory bodies in achieving our long term goals in the country which, in turn, will help the sector to grow as well as harness entrepreneurial talent in the country.

What are your views regarding the prevailing regulatory environment in the sector?

The current regulatory environment looks very conducive to do business. India remains one of the top global destinations for foreign investment, despite recent headwinds. The main drivers are its solid domestic market, an educated workforce and competitive labour. The infrastructure, consumer products, industrials, technology, media and telecom (TMT), and life-sciences sectors are set to drive India?s growth over the next two years. The mood in the country seems very upbeat with the new government and we are also very happy to see the change. We hope to contribute to the dream of Digital India and Smart Cities and take the growth of the country to the next level.  Moreover, from what we can see TMT is the most attractive sector to investors, followed by industrial and business services. We expect TMT to remain the leading sector.

What is your growth strategy for the Indian market? What are your investment plans for 2015?

We aim to offer fixed-line broadband and public Wi-Fi services in the country. Our initial focus for 12-24 months will be on metro cities, since there is a concentration of subscribers in these cities. Moving forward, we would be tapping the semi -rural and rural areas of the country for the internet services.

What are some of the emerging trends that you foresee in India?s telecom market in the coming years?

I believe growth will, of course, continue. There is still huge pent-up demand for telecom services in the burgeoning middle classes and aspiring consumers in the emerging markets.

  1. Increased adoption of smartphones leading to demand for internet connectivity and digital services: Over the last 12 months, the nature of this demand has changed. In the place of fixed-line services, the adoption of smartphones by consumers has created significant demand for Internet connectivity and digital services in all its forms. In 2015, this trend will accelerate.
  2. Instant messaging and ?in-app? calling: The biggest growth area will be instant messaging and ‘in-app’ calling through applications like Skype, WhatsApp and Nimbuzz. A recent GlobalWebIndex survey found that instant messaging applications grew by a massive 113 per cent over the last two years, driven by their low cost, the rising number of people who carry smartphones as well as the lack of the infrastructure to carry landline calls to remote regions.
  3. Competitive pricing and packages from service providers: This is something that will appeal to ambitious telecom companies because, over the last few years, profitability from selling fixed-line connectivity has come under pressure. There has been a fierce price battle among the telecom companies for voice services, driving down prices to almost unprofitable levels. At some point, they will have to adjust their price points upwards, but this will drive more people to the very instant messaging and Voice over internet protocol (VoIP) services that are, perhaps, already cannibalising the operators? sales.
  4. Tailor-made offerings as differentiator: In anticipation of this shift, the telecom companies have already started tailoring their product offerings; concentrating, instead, on selling unlimited data packages and competing on speed, price and coverage. But, this is only a short-term solution to the wider problem. As more companies enter this territory, prices and profits may also decline, leaving margins razor thin again.
  5. More mergers and acquisitions in the telecom and messaging space: Smart telecom companies will, instead, move to acquire the social messaging platforms themselves. They will compete for a share in the application market, making additional revenue by selling valued added services (VAS). They may, for example, turn their applications into e-commerce platforms, allowing companies and users to collect and receive micro-money transfers. Demand for mobile money transfer services is high in the emerging markets because of the lack of existing infrastructure. This shift may also pave the way for the Internet giants, like Google and Facebook, to transition into fully-fledged telecommunications companies themselves. This trend is one reason why New Call recently acquired Nimbuzz, a fast-growing Indian mobile technology brand with more than 210 million users across the globe. It is one of the most popular messaging applications in India and Middle East and North Africa region. . It is a central plank in our strategy to build an ecosystem of mutually-supportive applications that can be commercialised through elective add-on services. We have already launched, Holaa!, our new breed call management platform, and will continue to launch more innovative applications in 2015.

I believe that in 2015 we will see the first signs of a huge telecom revolution, one which will be powered and driven by the developing world. Their customers are demanding new applications and functionality; new affordable solutions and new platforms that power their digital lives. And if we want to be part of it, we?d better listen to them!

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