“Operators must create large volumes to sustain in the long run”

How do you look at the Indian mobile market considering the fact that it has been growing at around 90 percent in terms of subscriber base? 



The first phase of consolidation has helped in reducing the number of players but it has resulted in providing an excellent growth. The Indian market has already seen the lowest prices anywhere in the world as the tariffs are even lower than the Chinese market. 

The Indian market is a high-volume, low-margin market and only those operators who can create large volumes can sustain in the long run. Even on the vendor side, we might see few strong players. Players who have a strong positioning and can support price demand of operators. Some small players do disruptive pricing for attracting attention but it cannot go for long as everybody is interested to see a healthy market. 

The lowering of tariff on regular intervals has put a lot of pressure on vendors as well as operators. The operators have to regularly meet the surge in traffic volume as well as increase in subscriber base. One has to build the network at a fast pace.

The lowering of ARPU puts a lot of pressure on equipment vendors in terms of reducing prices. With prices coming down every month the equipment or system should be developed to suit the market needs but somewhere there is a cap and one cannot go beyond that level. 

What is your forecast for the Indian cellular market in FY 2003-04? 



In terms of cellular infrastructure, the Indian market will see a net addition of around 15 million lines (inclusive of GSM as well as CDMA) in FY 2003-04. And the total cost of provisioning so many lines will be around Rs 11,250 crore to Rs 12,750 crore (inclusive of value added services). The subscriber growth will be across the country and with increase in demand, service providers can start service in areas where there is practically no service. 

What are the opportunities on the CDMA space? 



On the CDMA front, one can see second phase of expansion in Reliance Infocomm. Tata Teleservices has gone for 7 million line expansion which reflects their confidence in the growth of the market. One can also see significant opportunity coming from incumbent operators–BSNL and

MTNL. 

The company has not been doing well on the handset front. What is your handset strategy for the Indian market?



On the handset front, we are not in the number two position but we are increasing our product portfolio and expanding our market presence. In the last one year we have launched 10 models for each of the segment–lower, middle, and high-end segment. We are very aggressively positioning on pricing and features. We are also diversifying in terms of channels strategy expansion and promoting push packages through operators. 

Pravin Prashant