It is January third week, and ear-pads seem to be a common sight on Chennai roads. Not for listening to music, but as a protection against the ‘chill’ weather. At 26 degrees Celsius, is this winter, wonders Stefan Kercza, Hub Head, Tamil Nadu & Kerala, Uninor.
Back in Denmark, from where Stefan has relocated to Chennai with his family, the weather forecast at the time of writing this is ‘cloudy with a little snow.’ Maximum day temperatures around minus 1 degree Celsius, minimum night temperatures around minus 9 degrees Celsius, informs www.denmark.dk.
Stefan, however, has things other than weather filling his mind. “Ini en number,” he tells me, at the start of our recent interaction in Nageswara Rao park. “Now we are moving on to the next phase, entering the post-paid services. There is a huge potential for this here in India. We have gained tremendous knowledge and expertise offering such services in our operations in other countries. We are No. 1 or close to it in our operations in Europe/ Nordic countries and other Asian countries. We will bring this expertise to India.”
Excerpts from the interview.
You are not deterred by the falling ARPU, a major concern in the industry. Why so?
We have not gotten into the price war. Populist low-cost, per-second charges are not sustainable in the long term. Falling ARPU (average revenue per user) is a result of this price competition and the resulting customer churn.
Again, our target is not to be the No. 1 player with the greatest market share. We are looking at 8 per cent market share in the next 3 to 4 years. Our products and price models are designed with a long term customer relations perspective and not short term wallet share of the customer.
We are targeting a segment that demands quality and service, at affordable prices. We are focused in positioning ourselves in this segment.
What are your observations about the Indian mobile phone user, as compared to those in Europe and other developed countries?
Mobile phone market in Europe is a mature one that has more than 100 per cent penetration. As such, European mobile phone users are high-end customers who seek voice and data services.
European consumers have two or more mobile subscriptions, which artificially boosts the region’s penetration level. Hence high penetration levels in Europe do not indicate a saturated market. Users in Europe and other developed countries seek technology upgrades and enhancements.
Indian mobile market though a decade-old is still in its infancy. Penetration here is still low with B & C towns and rural areas still not penetrated enough. The Indian mobile phone user has just begun to enjoy the power of mobile technology.
Operators have just gone for market share without adding ‘value’ to services rendered. There is no clear market segmentation, loyalty programme or retention strategy. To add to the confusion, the customer is bombarded with thousands of tariff plans from the 13 plus operators in the market.
How do you see the VAS space growing, in the next few years?
VAS (value-added services) offerings are popular among the youth segment which is almost 50 per cent of the Indian population. There is a huge potential as mobile VAS revenues are growing at a CAGR (compound annual growth rate) of 50 per cent. In India the revenue from MVAS (excluding P2P SMS) amounted to $43.8 million in 2004, and is expected to increase to $348.8 million in 2009. (VAS component break-up: Info services 25 per cent, ring-tones 34 per cent, games 31 per cent, video-sharing and mobile TV 8 per cent; and music 2 per cent.)
Do you find the young generation driving the growth of the telecom market?
Of course, yes. Almost 50 to 54 per cent of the present population are in the age group of 19 to 44. India has a very large youth population in the working group. In the years to come this is expected to grow and this segment is strong enough to influence the other segments as well.
Your strategy for the rural and non-urban market, as also the urban market that is perceived to be already saturated.
We are definitely looking at the non-urban market for that is where a good chunk of our growth potential lies. As for the rural markets, we are still in the infancy stage of our entry into India. Going forward, we will take informed decisions on new markets.
At this time we are focussed on providing good voice clarity and good network. We will take a cautious approach and venture into these areas only after the basic infrastructure is put in place. We hope to move forward in this direction progressively.
Yes the urban market is getting saturated. But the opportunities through customer churn coming out of good quality services is something we are looking at. Moreover, trends are changing. People in the urban areas are also moving towards dual SIMs.
What are the changes that you would like to bring to telecom marketing and customer service?
• Good network and voice clarity, and quality of service.
• Providing the customer with simple plans that are aligned to his usage needs and not just low cost plans.
• Providing the customer with simple and transparent plans that are aligned with his needs.
• When dealing with customers we will adhere to our core values: Keep promises, be inspiring, be respectful, and make it easy
Our marketing focus is to keep the customer as the central focus. It is no longer about providing technology; technology is given. It is about empowering the customer with quality service and tailor-made products.
Can you tell us about the key challenges ahead of you in 2010?
Focus on revenue market share and providing value to incumbent users.
For new customers falling into the category, providing benefits and value additions.