Tata Teleservices COO Sandeep Mathur discusses the company's future plans and operations and hopes that the unified licence regime will give it a level-playing field
Chennai: Even after 28 years of selling experience under his belt, Sandeep Mathur, chief operating officer, Tata Teleservices, still feels like a fresher. Terming that he is on the wrong side of fifties, this genial B-Tech (IIT, Kanpur) and MBA (IIM-Ahmedabad) executive draws a parallel between selling photocopiers and telecom services.
Mathur, who spent a major part of his corporate life at Modi Xerox, says: "Initially we sold just the copier boxes. Later we started selling solutions. Similarly, from selling just landline connections, we are now selling total telecom solutions."
Heading Tata Teleservices' Andhra Pradesh operations, Mathur is expanding the company's subscriber base at a faster pace. "We are adding at an average of 25,000 subscribers per month; around 16,000 will be for our CDMA [code division multiple access] mobile service and the balance will be for fixed wireline and fixed wireless services."
Tata Indicom, which currently has around 3.5 lakh subscribers (fixed line: 1.2 lakh; fixed wireless: 90,000; CDMA mobile: 1.4 lakh), offers its services in 12 Andhra Pradesh cities. "By January we will reach the 4-lakh subscriber base," Mathur adds.
But competition is hotting up, with Reliance Infocomm starting its CDMA and fixed wireless services recently. The company has ramped up a subscriber base of 3 lakh in the mobile telephony segment. Similarly, Tata Teleservices will have to contend with full mobility service providers like Idea and Bharti with a subscriber base of 12 lakh.
"In the case of the wireline segment we only have Bharat Sanchar Nigam Ltd (BSNL) to compete with," cites Mathur. According to him, the government company has a fixed line subscriber base of 33 lakh in Andhra Pradesh.
Mathur shares with domain-b the company's future plans and its operations. Excerpts:
What will be the impact of the proposed unified licence regime on your company?
The unified licence regime will give us a level-playing field. But a lot depends on the final guidelines on interconnect charges. Tata Teleservices in Andhra Pradesh will not have to pay any additional licence fee to get the unified licence as we belong to the first set of licencees who later migrated to the revenue sharing regime.
Nevertheless, to benefit out of the level-playing field you will have to invest an additional amount. What is your future investment plan?
Up until September 2003, we invested around Rs 1,850 crore in Andhra Pradesh. Our near-term - six to 12 months - plan is to be present in 100 cities. Initially we will roll out our CDMA services in the new cities and later offer the traditional landline and the new fixed wireless connections. We are investing in around 1-million subscriber capacity. The per-subscriber investment will be around $60.
What about the revenues?
Despite the fact that the tariffs are going down, our revenues are on the upswing, thanks largely to the increase in the subscriber base. Our average monthly revenue is around Rs 27 crore. Last year, around this time, it was about Rs 19 crore.
And the average revenue per line…
Our average revenue per fixed line will be around Rs 910 in Hyderabad. In the case of CDMA mobile the figure is around Rs 680. For the circle as such the figures will be slightly lower than the above.
It is said that the demand for data services is what is driving the new telephone subscriptions.
It may be true in a market like Chennai. But in Andhra Pradesh there is a considerable demand for voice. The demand for data service is huge in Hyderabad and Vishakapatnam. Our dial-up Internet subscriber base is around 8,000 and the digital subscriber line (DSL) customer base is around 800. The DSL service is offered partnering with the Chennai-based Dishnet, an Internet service provider.
How is your marketing set-up?
We have divided the corporate market into two segments - large and small. The large corporates - those having a nationwide presence - is taken care of by TIEBU [Tata Indicom Enterprise Business Unit]. TIEBU markets the group's entire telecom offerings. The small corporates and individual users in the state are wooed by the circle marketing team. In Hyderabad we have a 62-per cent share in data services, and the voice share is 56 per cent in the corporate segment in Hyderabad.
What about your distribution channel?
Apart from TIEBU the other distribution channels are dealers, company-owned and multi-brand retail outlets. In Hyderabad we have eight showrooms (dealer and company-owned put together). By the end of this month the number will rise to 11. We have 33 dealers and this number is also set to go up. Our entry into the multi-brand retail outlet segment is recent.