Sistema Shyam’s new Russian Chief Executive Officer Dmitry Shukov is on a mission.
He wants to make the Indian operations achieve positive operating income before depreciation and amortisation by 2014.
Central to his strategy is an aggressive roll out of next generation data networks across nine circles, based on a technology called Evolution Data Optimised Revision B (EVDO Rev B).
To do this, Shukov has to have minimum of 3.75 MHz of spectrum. The company had bought this amount of spectrum during the auction in March for $665 million hoping to roll out the new technology in a bid to compete with operators such as Airtel and Vodafone, which are offering data services using 3G spectrum. But Sistema Shyam’s calculations have been hit with the Department of Telecom yet to allocate the entire chunk of spectrum the company had won in the auction.
While the company has 2.5 MHz spectrum from the earlier operations, before its licences were cancelled post the 2G scam expose, it cannot deploy EVDO Rev B without the additional 1.25 Mhz for which it has already paid to the Government.
Rev B-based data service
In his first interview after taking over as the CEO, Shukov told Business Line : “We want to be the best data provider in India and Rev B is our priority as it makes us competitive in the market. Our network is ready, our team is ready to take off. We are just waiting for spectrum.”
The company had earlier launched data services using Rev B technology in Jaipur where it has additional spectrum and here the company is getting more revenue from customers than regular data users.
The advantage for Sistema Shyam is that it has bought spectrum in the 800 MHz band, which is considered to be efficient in terms of cost of operations compared with the 2100 MHz band being used by 3G operators. Meanwhile, Shukov is readying the organisation to better address consumer needs. One of the first things he has done internally is to ask every employee to spend time in the market.
“Interacting with customers, getting feedback allows us to take faster decisions,” said Shukov.
The organisation structure has also been simplified by removing a layer of regional heads. Now, all the circle-level CEOs report directly to Shukov.
Tapping app developers
To make data services more relevant, the company is engaging application developers and other third party content providers to develop local content.
“We are targeting to be operating income before depreciation and amortisation positive in 2014. It is the top most priority for us and we must focus our energies on this mission. To reach our goal, we need to switch gears and make faster decisions, be agile and focus on quality of execution,” said Shukov, who was earlier associated with Sistema’s operations in Turkmenistan and Uzbekistan.
But the Indian market, with its regulatory uncertainties and large competitors is a different game for the Russian. “India is a big market and this will require us to continuously innovate, leverage the strength of our core business and accelerate growth across all our business lines,” Shukov.