Creating a Buzz

Tata Teleservices remained static at #7. The company's telecom services
revenue grew by 12.4%.

An important milestone for the company was Japanese telecom major NTT DOCOMO
picking up 26% stake for $2.7 bn. TTSL also concluded a swap deal with Quippo
for the tower business. The company unlocked its passive infrastructure by
divesting 49% stake in its tower arm Wireless-TT Info-Services to Quippo Telecom
Infrastructure. The deal is likely to result in one of the largest tower
companies in the world with 50,000 towers by 2012.

In an effort to capture the rural market, the company started operating a
Hindi website as well. The company is already providing news and applications in
eleven languages on common CDMA mobile phones. TTSL launched a host of services
targeted at the rural community. Some prominent services include Mkrishi, which
is an SMS-based advisory service for farmers; Mandi Bhav, which facilitates
optimal priced discovery; Fisherman's project, that provides weather forecast
and satellite data on a fisherman's handsets and m-education, offering services
like Mgurujee that enables users to download and access test modules online on
their mobile phones, allowing learning to extend beyond the traditional
classroom.

To appeal to the customers from the other end of the spectrum, TTSL launched
BlackBerry services in the country and also became the first operator in the
country to offer Facebook and Nimbuzz.

TTSL also would be investing $2 bn to expand its telecom business, with a
major chunk going towards rolling out of GSM services in the country.

Early last year, TTSL also decided to restructure its retail operations. The
company which operates two store formats-True Value Hubs and True Value Shoppes-decided
to consolidate its retail operations under a single brand, 'Tata Indicom
Exclusive Store.' Apart from that it also added a new format of stores called
Sansar stores, which are operational in towns with population of less than
50,000. TTSL has added over 1,000 retail stores across the country which include
both franchisee and company-owned stores. The company plans to have 1,300 stores
by the end of the current financial year.

TTSL is all set to enter the GSM space and would be launching services in the
next three months in the southern part of the country. The year saw two
prominent CDMA players, Reliance and TTSL, enter the GSM space. CDMA players
generally witness a significant contribution to revenues from data and this is
true for TTSL as well. The contribution of data services to its overall revenue
was 14% in FY 2008-09 while the average for GSM players is around 9%.

The company believes that 3G will be relevant for both urban and semi-rural
areas. The key application in 3G networks, especially in rural and semi-urban
areas, will be basic broadband access. NGN technology can enable rollout of a
few applications particularly relevant to the rural markets in India. TTSL is
investing heavily in providing relevant content to provide value to its
customers.

'We are investing heavily on relevant content for our customers'

Managing Director, Tata Teleservices  Anil Sardana Address: Rational House, Appa Saheb Marathe Marg, Prabhadevi Mumbai-400025 Tel: +91-022-5667-1414 Fax: +91-022-5660-5335 Website:www.tataindicom.com Highlights NTT DOCOMO bought 26% in TTSL Launched services in three new circles Swap deal with Quippo for tower business Plans to roll out GSM services in other circles To invest $2 bn What were your major achievements last fiscal and the key highlights? The last financial year has been quite exciting for TTSL. As the momentum continues for customer acquisitions and networks reach both rural and urban landscape, Tata Teleservices completed its pan-India operations (twenty-two circles) with the launch of three new circles, viz Assam, Jammu & Kashmir, and NESA circles in December 2008. There was a lot of action in terms of strategic tie-ups and mergers. NTT DOCOMO bought a stake of 26% in TTSL. We also unlocked our passive infrastructure during the year by divesting 49% stake in our tower arm Wireless-TT Info-Services to Quippo Telecom Infrastructure, valuing the tower company at $2.6 bn. Trai rated us as the least congested network four times consequently in the last one year. What were the major products and services launched by you last fiscal? On the products and services front there were many firsts. We were the first operator in the country to offer Facebook on SMS and also IM communities on one platform. We launched our BlackBerry services and Photon Plus wireless broadband services. We also increased our retail footprint and added new format of stores called Sansar stores. Over the last year, TTSL added over 1,000 retail stores across the country which includes both franchisee and company owned. TTSL ran a talent hunt contest based on the brand premise Suno Dil Ki Awaaz. We are also the first operator in the country to operate a Hindi website. What are your plans and strategies for the current year? What kind of growth are you looking at? FY 2009-10 will see us scale the momentum we set in FY 2008-09 in terms of products, services, sales and invention of newer technologies. The current year will be full of zeal and vigor as we roll out the much awaited GSM services in select circles. On the VAS front, we'll see uptake of m-commerce services. While m-commerce is in its nascent stages, it is slated to boom over the next few years with the growing sophistication and lower prices of mobile handsets. What is your strategy for 3G and WiMax? 3G will be a turning point not only for us but for other operators as well since it will enable high speed data transfer between handsets. This would throw open a completely new set of opportunities in video streaming, m-commerce, music download etc. We are awaiting the government's nod to jumpstart 3G services in India. What major challenges do you anticipate? The mobile telephony business is highly competitive with over four-to-five players in each circle. More players are expected to roll out their services soon, which will further alter the competitive landscape. Hence customer acquisition cost will rise for all players. Also, technology is rapidly changing hence there is a constant investment in technology, which will keep capex on a higher side.