Uninor to achieve break-even a year in advance

Firm takes sabse sasta to a new level; to woo the mass market with lowest tariffs in voice, data and internet on 2G.

Updated: Sep 16, 2013, 12:43 PM IST

Mumbai: Firm takes sabse sasta to a new level; to woo the mass market with lowest tariffs in voice, data and internet on 2G.

In the four years since its humble entry into the country in 2009, Uninor has shown that it does not want to be perceived as just one more insignificant greenfield operator. It dared to be different through the years with its ‘sabse sasta’ approach (or the lowest priced mobile telephony services), prepaid services and slow circle expansion. This, when larger players were doing just the opposite (that is, switching from prepaid to postpaid).

The joint venture between Norwegian telecom major Telenor and India’s realty major Unitech has been riding its outside-in, customer-first strategy all these years, and is now on the verge of achieving break-even by the year-end, one year before the target, despite reducing its number of circles from 13 to six and losing three licenses last year.

“When we entered (the Indian market), we made it very clear that we wanted to be the best in basic services – voice, SMS, browsing, which make up 98% of customer requirements. Secondly, we wanted to be the best in mass market distribution, by unifying our partners, vendors and distributors. Thirdly, we adopted an ultra-low-cost model,” said Yogesh Malik, CEO, Uninor.

“Through all these methods, we were able to achieve the lowest cost per minute – 30-40% lower than competition, as well as reduce IT cost by 30-40% lower than competition. In addition, we also asked our call centre to reduce repeat calls. Using these methods, capex and opex also automatically reduce, as with better network capacity, one requires fewer sites,” Malik said.

Which is why Uninor is not as eager as other operators to win 900 MHz spectrum or going from prepaid to postpaid.

“While we are going to be moving from 4.4 MHz to 5 MHz, with the spectrum we won, we need to focus on our mass market and cluster strategy – and 1,800 MHz is enough to fulfil demands. Resources alone don’t make the difference, customers make the difference,” said Malik.

As for the prepaid-to-postpaid switch, Uninor believes that its postpaid push will actually reverse the trend of active net additions and lower churn, because the mass market it caters to demands transparency, control, predictability and value, all of which the prepaid segment offers.

This means, even moving from voice to data, 2G, 3G or 4G, mass market customer needs will need to be catered to, even at the cost of going against the grain.

Uninor is bent on delivering better services and building its current base. Not for it the strategy of other greenfield operators who are in debt due to rapid expansion of their circle footprints.

“Our objective was to break even and become cash flow-positive five years into operation. We are advancing that by one year. We have six circles, with half of India’s population. So, we’ll focus on this, rather than expanding, and create a much stronger brand. We are present in circles which still need expansion and serving customers in a much more transparent manner, and that’s what we need to focus on,” said Malik.

DNA/ Beryl Menezes