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Telecom newbie Videocon Telecommunications is embarking on a three-pronged game plan to get a foothold into the mobile market dominated by the likes of Airtel and Vodafone. Videocon Telecom’s Chief Executive Officer Arvind Bali has made a strategy roadmap that includes being the cheapest, leveraging synergies with other businesses of Videocon and using technology to do something that none of the existing players have done so far.
“We will be 15-20 per cent cheaper than our competition at any given time,” Bali told Business Line outlining the strategy. Videocon has launched GSM-based mobile services in 4 circles and is planning to launch services in 3 more with an investment of around Rs 2,500 crore.
Incentives
In comparison, rival players such as Airtel have pan-India operations giving them scale of operations. But Bali does not see this as a problem. “In the long term, we will become a pan-India player but, as of now, our focus is on doing the best in the circles where we have won spectrum. The customer is not concerned whether I am a pan-India player or not,” says Bali. While the company is trying to lure customers through pricing, it is giving incentives to retailers through schemes that offer consumer durables such as food processors, geysers and induction plates.
“This program not only offers the gifts in advance but also offers the highest incentive per activation in monetary value across the industry,” says Bali. Videocon is also rolling out 500 retail outlets where it will sell not only mobile connections but also Videocon phones and DTH services.
But the biggest gamble which the telecom operator is taking is on using technology.
The company is in talks with technology vendors such as Nokia Siemens to deploy fourth generation broadband services using the 1800 Mhz band. The challenge for the company is that it has only 5 Mhz of spectrum in this frequency band, where many other existing players have found it tough even to offer voice services.
“We are confident that we can do narrow band data services on 1800 Mhz spectrum. We should have some pilots next year,” says Bali. If Videocon is able to pull this off, it will change the dynamics of the data services market where larger players have spent billions of dollars to acquire additional spectrum just to offer broadband services.
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