RCom led the voice revolution; we intend to do the same in data A quarter of Reliance Communications’ mobile customers use data, and a quarter of them are on 3G. Over a fifth of its wireless revenues come from non-voice services, which it says is the highest in the industry. Gurdeep Singh, president and CEO, RCom, discusses the company’s investment plans and its strategy to attract more customers and increase data usage. As per your quarterly report, you have over 125 million wireless subscribers and about 7 million 3G users. How do you hope to fulfill the company’s dream of seeing a 3G phone in the hands of every Indian? Reliance Communications has been committed to making mobile communications accessible to every Indian. Ever since RCom entered the market, we made sure that ownership of a mobile connection was not limited to a privileged few, but became affordable and accessible to a much wider demography. RCom led the voice revolution to make it a mass phenomenon; we intend to do the same in the data space as well. This is an inherent part of RCom’s objective to take high-speed data services to every smartphone- and tablet-user in the country, without them worrying about incremental or high costs. By breaking the 3G entry barrier, we plan to bring about a behavioural change and take the benefits of quick data access to everyone—impacting not just lives, but lifestyles as well. Reliance Communications is currently serving over 31.1 million mobile Internet customers who enjoy a superior Internet experience on Reliance’s ‘built-for-video’ network. To put this in perspective, 25% of our overall customer base uses data services. Of these 31.1 million data customers, over 7.7 million—around 25%—are subscribed to active 3G data services. In all, 21.3% of RCom’s wireless revenues come from non-voice services, the highest in the industry. With our continued efforts since we launched 3G services in 2010, we have worked diligently to ensure that the 3G ecosystem evolves in India and emerges as a mass technology platform, affordable to every Indian. Your 3G network is spread over 333 towns in 13 circles. What kind of investments is your company looking at to upgrade and expand this network further? RCom’s state-of-the-art 3G network has been built-for-video from day one, and we continue to expand the same, in keeping with the company’s rollout and footprint expansion plans. RCom has also issued a pan-India capex guidance of around Rs 1,500 crore for FY14, largely on account of expansion of its 2G, 3G and high-speed data networks. As far as our 2G networks are concerned, both on the GSM and CDMA platforms, we have an innovative expansion drive through arrangements with Aircel, Loop Telecom and Tata Teleservices. Through this ‘smart expansion’ drive, we now have access to an additional 10,000 base transceiver stations, significantly improving our network reach and increasing our addressable market by around 150 million potential customers and Rs 10,000 crore. RCom is also in talks with other operators for similar arrangements and we will announce the same in a phased manner. RCom operates both CDMA and GSM (2G and 3G) networks, which are strengthened manifold by our wireline and pan-India optical fibre networks. Multiple platforms, technologies and application offerings make for increased network complexities, and with a view to improving efficiencies and productivity, RCom outsourced the end-to-end network management to Alcatel-Lucent and Ericsson in multi-billion dollar long-term contracts earlier this year. This move will help further optimise network utilisation and ensure that our subscribers continue to enjoy a seamless and superior telecom experience. This initiative was India’s first integrated and largest multi-vendor, multi-year wireline and wireless managed services contract, ever. Reliance Communications intended to bring in expertise of the world’s leading vendors to execute transformational projects which will provide customer management solutions, addressing the key areas of performance, faults and security. This puts RCom in a unique position by adapting the collaborative approach forging long term partnerships for an exceptional network experience of its customers. Could you please tell us about your mobile number portability strategy, to pull in mid- and high-value customers from the other telecom companies? With the stream of innovative offerings and the advantage of a superior network, RCom has experienced a positive subscriber inflow from MNP, which has been very encouraging. The port-ins in the MNP process have been higher revenue customers who have been wanting to switch to a network built for video and high-speed browsing. What strategies have you adopted to increase data usage? Reliance Communications is continually working towards higher adoption of data services by its customers. At RCom, we are creating a healthy ecosystem for data services through our 3G and high-speed data networks, providing affordable products and services by entering into relationships with leading handset brands. We have also entered into partnerships with social media networks and content providers to allow easy access to social networks, extensive video content, photo sharing, music downloads, wallpapers and much more. Technically speaking, the end-user experience depends as much on network architecture and efficiency as on the handset or data device being used. Against this backdrop, we have not only launched programmes to educate users, but have also tied up with leading device manufacturers to provide a robust device ecosystem for its customers. For instance, we launched the Reliance 3G Tab last year, which shook up the tablet market scenario in India and introduced the concept of ‘affordability with quality’ in India. Therefore, with the amalgamation of seamless and diligent network, by making 3G available at 2G rates, and by increasing the availability of affordable and quality handsets and devices, Reliance Communications has achieved 14% QoQ Internet traffic growth on its network. We are the leading data company in the Indian telecom industry, with non-voice revenues making up 21.3 per cent of our wireless revenues, as on June 2013. After our game-changing 3G@2G prices offer, we have seen demand for 3G increasing sequentially and are witnessing a strong growth on that front. Mobile applications are a big rage at the moment. Social and video apps are catching up, but utility apps have yet to. Do you see yourself becoming a part of this value chain? With the evolution of the Internet on mobile devices, and with the Android Open Platform supporting unrestricted access to content across the Web, telecom operators are moving from a closed web ecosystem to an open web-based content strategy. Application stores of operators are becoming less relevant in the changing scenario, with Android based phones growing. The mobile application environment is in the process of finding a new equilibrium where popular application platforms will get established. Reliance Communications is engaged in almost every element of enhancing data usage ecosystem for its customers, either directly or indirectly. From time to time, required initiatives are affected—with a view to make the best options available to RCom customers. With over 60% of India’s population being under the age of 35, India-specific apps are gaining volumes and there will soon be a robust ecosystem of utility apps that address the specific requirements of Indian Internet users. RCom has reduced its promotional and concessional offers by nearly 65%. How do you hope to maintain a balance between providing affordable services and quality services to attract more customers? At Reliance, quality is never at the cost of affordability. Last year, RCom took the lead and raised headline tariffs across the GSM and CDMA platforms by 25%, to 1.5 paisa per second. Recently, we completed migration of most of our customer base to these headline tariffs, since the process takes between two and three quarters to completely implement. In the first quarter of the current financial year, we reduced promotional and concessional offers by as much as 65%, increasing baseline tariffs by 20% across all our Commitment Plans. These changes have enabled us to grow our revenue per minute by 4% in the quarter, and this now stands at 45.7 paise per minute, the highest in the industry. How do you see m-commerce evolving? How is Reliance planning to incorporate this in its present or future products and services? Reliance Communications has been continually offering and evolving M-commerce utilities for its customers. Besides entertainment, M-commerce is one of the most important components of VAS offerings with tremendous scope in a geographically difficult country like India where banking is yet to reach the hinterland. This is a fast-emerging opportunity and we are working with content providers and application developers to gain a front-runner advantage in this space. What are some of the big trends the mobile broadband sector should be looking forward to? The broadband sector will be the new growth driver that the Indian telecom sector has been looking for and is beginning to gain traction and catalyse the Indian data revolution. This again is a fast-emerging opportunity and we are working with relevant partners to tap into this opportunity as well—that should further entrench Reliance Communications as the leader in the Indian data market.
Posted on: Fri, 18 Oct 2013 07:32:48 +0000
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