NEWS & VIEWS: "Even as single-state operator you can survive and make money"

Spice is the first mobile operators to have started services in Punjab. Then
it became the first service provider in India to sell self-branded phones and
may soon the become the first service provider with a stake in handset
manufacturing. VOICE&DATA spoke to Navin Kaul, its COO, about facing the
competition and future plans. Excerpts:

You market handsets. Do you also plans to manufacture them?

There is a lot of noise in the country that all the handsets manufacturers
are from outside and the revenue getting accrued is not invested back in the
country.

So as a group we have decided that we are going to be in the handsets
business.

Initially, they are being manufactured in China. But we are working on a
feasibility study with TCL, and might actually go in for manufacturing. Talks
are at a fairly advanced stage.

Will you be manufacturing the handsets in India by the end of 2005?

Very close to that. Yes.

How are you facing the GSM competitors in Punjab?

Our USP is clearly our edge in Punjab. We have delivered whatever we have
promised. Another achievement is going into the rural markets in a big way. Our
brand is very strong in Punjab. And that's what helped us launch our handsets
here. In fact, we had thought it will take about three months to sell ten
thousand handsets, and we actually sold them in three days.

Reliance is now in Punjab. How are you dealing with competition?

CDMA is gong to be different from GSM. I don't know how it will shape after 2—3
years, but I think there is still a lot of preference for GSM.

What would you attribute that to?

Any network requires at least 2—3 years to mature. It takes a long time to
sort out the billing issues. I think they are going through that grind. I have
been in this business since 1995, so I know its vagaries.

There has been a lot of M&A in the industry. Any plans....

Spice is not a dying organization. We have proved to the telecom operators
that even as a single-state operator we can survive and make money.

It is not always the dying companies that are acquired.

If we get a good valuation, why not?

Does it depends on valuation?

I am the operating person. It is a decision that the shareholders will have
to make. I have no knowledge of any such plans as of now. But if it happens, I
would not be surprised.

What are your expansion plans?

We have very aggressive plans on our network expansion, both for capacity
and coverage.

We had 433 base stations at the beginning of July. We are adding 510 more, so
we should tale it to about 943 by the beginning of November.

Alok Singh