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Non-voice services to play a dominant role
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The country’s largest cellular operator, Bharti Airtel, is gearing up to consolidate its India share and expand global footprint. The company, which reported a 32% fall in its April-June net profit, is looking at rolling out 3G services by year-end. The telecom operator has earmarked a capital expenditure of $3.1 billion (over `14,000 crore) for India and other global operations in the current fiscal, and is betting big on non-voice offerings. Atul Bindal, president, Mobile Services, Bharti Airtel, discusses company’s strategy in a highly-competitive market in an interview with ET. Excerpts:

A number of telcos have started operations in India over the last few years. Has it affected brand Airtel?

We are in the midst of some key changes taking place in the Indian telecom industry. There is a transformation from voice to data services. We have just concluded 3G and BWA auctions. There is a growing rural demand, an engine that continues to chug along. In fact, there has never been a more exciting time to be in the telecom space.

Over the last few quarters, the competition in the Indian market, which saw foray of many new players, was being played around price. There was no focus on network and brand distribution, which otherwise tend to be the key pillars of business.

However, there are some trends that are clearly visible. Ultimately, market shares have returned to the incumbents. Our network infrastructure, number of sites, width and depth of coverage, customer service capability, distribution strength and brand franchise have led to consolidation of rates.

And the 3G auctions are a first step to consolidation in the industry. We have always maintained that long-term viability of the sector, customer affordability and practical price play in the market—all these must co-exist.

Falling call rates have forced telecom companies to look at value-added services. How is Airtel gearing up on this front?

Going forward, non-voice would play an increasingly dominant role in our scheme of things. Airtel Apps store has worked well, with more than one app getting downloaded every second. It has been arguably one of our most successful launches. It is helping us create a serious vehicle for monetising non-voice services. While our non-voice revenue now stands at 11%, in three years, a substantial chunk of our revenue will come from non-voice offerings. This is a long-term strategic plan of the company.

With most of the handset manufacturers readying their set of tools and services, how is Airtel planning to take them on in the apps space?

The competition from handset companies is there, but it is a matter of consumer preference. Supported by our strong capability in the data warehousing and business side, it’s the near real-time capability where we can actually sense where customer preference lies. Otherwise, there are just hard-coded applications on devices and marketers don’t know which ones are really doing well. In our case, we can tweak these to customise them to local needs and preferences.

Our non-voice services, including apps, can be availed of without the need for a smart phone, thereby enabling us to address a much wider audience. Local customer relevance is also a key, along with the distribution reach that we provide.

How swift will be the 3G rollout in India?

If the licence cost had been less, it would have led to mass penetration. This, in turn, would have led to affordable rates for consumers. But what the current scenario means is that we can write off mass driving Internet for the rural and small town customers, to begin with.

The rollout of 3G services will be fast. Having paid as much as we have, there is no joy in keeping things on hold. The 3G spectrum bid and Zain operations buyout are strategic investments of vital importance to us. We are very well positioned, and have kept in mind the 3G responsiveness in the areas where we have won spectrum. Also, in all markets across the world, 3G and 2G networks have co-existed. This will happen in India also.

How is brand Airtel conveying the integrated nature of its offerings to consumers across different areas of operation such as DTH, mobile, fixedline telephony and broadband Internet?

We understand that we are an integrated brand now, and need to consolidate efforts to make an impact on the four screens surrounding consumers—the mobile, computer, TV and the theatre screen. Fortunately, we have a presence across all these screens.

We are among few telecom companies that are so well integrated vertically as to enable us to coordinate efforts in serving consumers better than others. The key, therefore, is to present one face of brand Airtel and convey the strength that it possesses. That is why different offerings from the company bear the same brand name and essence—connecting consumers to each other, to their devices, to information. That is what brand Airtel really stands for.
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