Ravi Sharma, CEO, Datacom
One of the new telecom licensees, Datacom is planning to launch services during 2008. The company, which has the strong backing of parent company Videocon, an established business house, intends to carve a niche for itself in the Indian telecom space, steered by Ravi Sharma, the chief executive officer (CEO) of the venture. In an interview with tele.net, Sharma discusses Datacom’s plans, strategies, thrust areas and potential challenges. Excerpts…
Is the telecom market big enough to absorb all the new players?
With the mobile subscriber base currently at about 250 million and industry projections of 300 million user additions by 2010, I would say that there is enough room for all players. When new players come in, the market expands and becomes more competitive, which is good for both the industry and users. To support the growth, it’s good that more players come in. We, at Datacom, will definitely provide positive contribution to this growth.
What time-frame are you looking at for rolling out services?
We will start network rollout by August 2008 and launch services sometime later this year. We plan to start from Tamil Nadu and work simultaneously in the rest of the circles so as to provide all-India service by 2009.
Are you looking to deploy your own networks or ride on other operators’ networks?
We are examining all options. We plan to hire as well as build passive infrastructure depending on the requirements, but we intend to give priority to sharing. For the active part of infrastructure, we would like to own the network ourselves as the current regulation does not make it easy to share active infrastructure. Also, sharing of active infrastructure without sharing of spectrum is yet to be tried successfully anywhere.
What are the company’s investment plans for rollout of services?
With a target of 50 million customers within five years, we plan to invest Rs 120 billion on active infrastructure. The investment on passive infrastructure will depend on the extent of sharing we finally decide to do.
Are the management and operating teams already in place?
We have been moving quite well on the organisation front and the top management team has been finalised. The chief technology officer and chief supply chain officer are already in place and the chief financial, information, marketing, HR and other officers are joining this month.On the recruitment front, we have received an overwhelming response. We already have more than 100 people and plan to be a 1,000-people-strong organisation by the time services are launched in the Tamil Nadu circle.
With the entry of new players into the secor, how do you expect the competitive landscape to change?
The entry of new players will create an impact on four fronts: products, reach, quality and customer care. In terms of products, it will create more choices for customers, enabling them to opt for a more price-effective product suited to their usage pattern.
Reach will definitely be extended with the arrival of new operators. A lot of areas that are not yet covered will be covered over the next two years.
There will also be a very positive impact on the quality of the network, which will ultimately be reflected in the quality of service. Comprehensive all-India RF planning coupled with modern equipment will contribute in delivering better voice and data quality.
The most important impact will be on customer care, which will be a visible differentiator. In order to make a dent in the market, the new operators will have to do a lot in terms of customer care.
What will be Datacom’s USP?
Datacom is not aiming for a niche market; it is aiming to provide a niche experience. We can’t just focus on any one particular market segment. It makes more sense to provide a niche experience to all our customers, which will be delivered through better network quality and customer care experience.
Do you foresee any difficulties?
I do not envisage any difficulty, but there are many challenges. These challenges are normal for any new company in an already established industry. The questions to ask here are: What is our strategy? What differentiation can we offer? It is up to us to create that differentiation in product and service to make our mark. In telecom today, there is no loyalty except the mobile number, and this too may go with number portability. This only goes to suggest that it does not really matter how long an operator has been around. The challenge is to create loyalty.
How different is your experience from that of the existing players?
The existing players had a number of years to establish themselves. They had the luxury of time and learning. We do not have those luxuries. We have to do things as of yesterday and that too, at most competitive costs. On the flip side, however, when the existing telecom operators started out, there were not many experienced telecom professionals in the country-so they had their challenges.
Do you think these challenges are more significant because Videocon’s experience so far has been in consumer products?
With respect to network rollout, we have more positives compared to the existing operators. The equipment today is more modern and effective-in terms of technology, throughput, flexibility, power and space efficiency, and cost. Of course, as mentioned earlier, there is one limitation and that is time.
Coming to your point of Videocon’s experience, I feel this is our biggest plus. With 40,000 distributors, who have been with Videocon for the past 20 years, we can achieve a degree of closeness to customers that will be difficult for others to match. We own relationships with 40 million homes in the country thanks to our leadership in TV and consumer electronics. The success of Videocon in establishing an unending rapport with consumers is a good example for us. We are thrilled to have the response of Videocon distributors for our venture. The excitement is positive and I am sure, with their support, we will be able to offer our customers a big differentiator.
Do you think there is further scope to decrease tariffs and still be viable in terms of profit?
Tariff is not a product of cost. In a competitive environment, however, it sometimes becomes a product of competition.Hence, it is very difficult for anybody to predict whether tariff will decline further. I strongly feel that if tariffs in India reduce further, it will be detrimental for the industry. However, new products and flexibility will definitely provide more effective prices to customers based on their usage pattern.
What are your views on improving the quality of service?
As far as falling QoS among existing operator is concerned, I cannot completely blame them. They have built their allIndia networks based on acquisitions of circles. We, on the other hand, have the luxury of designing an all-India network right from the start. Hence, we can design it more consistently, efficiently and use the latest technologies, which the existing operators could not obtain 15 years ago.
What kind of revenue targets and market share are you looking at?
We plan to achieve a 10 per cent market share in the next five years. In terms of numbers, we are targeting 50 million customers within five years.
Are you open to strategic partnerships?
Many international operators have approached us. We are open to strategic partnerships and are in the middle of discussions with them. Based on these discussions, we will decide who to partner with, if at all.
What regulatory hurdles do you perceive in the telecom sector?
On the regulatory front, there have been many positive initiatives. The regulator is becoming increasingly vigilant with respect to QoS. Hence, it has become almost customary for all new operators to ensure that their customers receive good quality services. I think quality is going to be the mantra for the next three years-whether it is the quality of the network or the quality of customer care.
What has been your experience since moving over from the vendors’ side of the industry to the operators’ side?
I have actually been on, and enjoyed working with, both sides of the industry. I worked for BT at the time when it held a 44 per cent stake in Airtel and 50 per cent in Bharti’s VSAT and internet ventures. Later, I worked with Alcatel’s satellite operator arm. Of course, my last experience has been with Alcatel-Lucent, as president of its South Asia operation. I must say that I am comfortable with, and thoroughly enjoy, both sides.
Datacom is more special. It is a big opportunity not only for me but for all employees of the company. It’s both challenging and exciting. There is no other alternative but to succeed.
Have you selected a vendor?
We haven’t yet, but are in discussions with them. We are releasing the request for proposal for 70 million GSM lines soon.
Have you thought of a name for the service?
We have, but will unveil it at an appropriate time.
Given the thrust on rural telephony and broadband, what are your long-term plans?
Since service providers are going rural in a big way, a large part of rural India is likely to receive telecom coverage. We already have a distribution presence in rural India through Videocon distributors as 70 per cent of the existing 40,000 distributors are in the rural areas.
Telecom can contribute significantly to the growth of rural India. Both voice connectivity and broadband are set to reach everywhere. However, more important than coverage will be the customisation of applications. Datacom will give special attention to rural India.
