Tata Teleservices

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The litmus test for TTL lies ahead as it adds another

feather in the Tata’s telecom ventures–basic telephony services.

Three months past its launch, Tata Teleservices Ltd (TTL)

already boasts over 4,000 subscribers in Hyderabad. Andhra Pradesh is, now, the third

state in India to experience private basic telecom services, only after Maharashtra and

Madhya Pradesh. These services range from basic telephony, leased lines, ISDN, voice mail

to centrex (centrex services offer integrated voice communication facilities to firms

having multi-location offices within a city), and data services. TTL’s best bet is

its state-of-the-art technology infrastructure and support. But it is also the strategies

the company will adopt to establish itself in this DoT monopoly market that will draw more

attention.

TTL is a group-holding entity of the Tata Group, AGI, and

Bell Canada International. "The real expertise, especially on process work, is being

roped from Bell Canada," explains Prabhat Pani, vice-president (marketing, sales, and

customer care), TTL. The basic network is designed with a combination of both in-house

initiatives and external expertise. Lucent Technologies is providing the state-of-the-art

telecom technology while back-office software support services comes from TCS, SAP, and

Kenan.

Technology Edge



Code Division Multiple Access (CDMA), Wireless In Local Loop (WILL), and fibre optic
wireline technologies will deliver the voice and data transmission requirements.

"Cost effectiveness and flexibility apart, the CDMA Group, will ensure the

upgradation of this technology," explains Pani.

The software requirements, too, are largely outsourced.

TCS, another Tata Group company, is lead managing the process work. The SAP linking is

used for inventory management, while Order Management System to keep track of customers is

procured from Kenan. In-house development, too, is being done for other allied

requirements.

Geographic Information Systems from Small World were

extensively used for establishing the wireline network. These were used for planning

exercises, setting landmarks, processing of data, etc. They are also to be used for

servicing and maintenance purposes.

Connectivity Plans



The network will initially concentrate on nine key areas in the twin cities of Hyderabad
and Secunderabad, which will be defined on the basis of the clog factor. The information

from focal points in each Customer Service Area (CSA) is later gathered for provision and

planning purposes. By default, the population is being bifurcated into specific defined

market segments. On the basis of these, calling patterns are being judged. Delay in launch

also gave ample time to TTL to check on the systems.

Currently, the wireless segment is stronger compared to

wireline. But with the completion of the network, the latter is to pick up significantly.

Wireless services currently span a 100 square kilometre radius through Hyderabad and

Secunderabad. The process of building tacts for wireline is on. The concentration is,

basically, on wireless plus wireline. In some areas, antennas, too, are being deployed.

For the corporate segment, the approach is different.

Service requirements in this segment include leased lines, high telecom shells, more value

addition, etc. Here, the approach is to offer total solutions. Value addition is to come

with unique features like the EWTRI, which if positioned as the main switch, will function

as an EPABX.

TTL has plans to offer basic telecom services throughout

Andhra Pradesh within a span of ten years. Currently, all efforts are focused on

completing the set-up at Hyderabad and Secunderabad, which are expected to generate 30-35

percent of the business. The outlay for the whole project is pegged at Rs 4,000 crore. The

launch of services in other major cities of Andhra Pradesh is on the anvil. First in the

pipeline are Vijayawada and Vishakhapatnam.

"We are concentrating on servicing which

could be a problem area." Major computerization is being undertaken. Software called

DoT Soft, developed by Andhra Pradesh Telecom is being installed for integration of all

service-related functions, like billing, connections, etc. The concept of

"single-window service" is being worked upon. "Today, DoT is in a better

position to meet the demand, I fear more capacity build up than demand," says CGM,

Andhra Pradesh Telecom.

Telecom has to be a co-operative effort as it is a network

and not just any other product, opines Ramanujam. "We are gearing up for any flaws in

customer servicing and would like to learn from others," he says. Whatever the

status, it is a competition between an organization bound by social obligations and one

caught in the race for return on investments, a race against time.

TTL has already established its presence in one of

the huge potential areas, the Infocity (formerly called Hi-Tec City) at Hyderabad where a

congregation of software developers has set up or are in the process of setting up base.

In the first phase of network deployment, TTL has established a remote integrated

switching line unit, which will be patented to the 5ESS digital central office switch

located at Khan Lateef Khan Complex. The link between Infocity and the central office will

be established with high-capacity microwave transport technology.

PCO Initiatives



The smart card-based public telephone booths are estimated to contribute 30 percent of the
revenues for TTL. Incidentally, all the basic service providers are venturing into this

lucrative segment which is a stronghold of the DoT as well. TTL has a tie-up with

Schlumberger of France for the smart card-based payphone system. Initially the card, which

is pre-programmed for a particular amount, will be given to booth operators. As the

numbers grow, the company plans to set up a distribution system for these cards.

Each booth is a franchisee unit costing around Rs 65,000.

The company claims the USP of these booths is the better value addition in terms of total

calling experience and a tamperproof technology to give accurate billing. Considering that

Andhra Pradesh accounts for nearly 10 percent of total STD/ISD PCOs in India, TTL is

definitely poised for good business. Hyderabad accounts for 23 percent of these installed

PCOs in the state.

Services and Marketing



A range of user-friendly services from TTL include International Direct To Home, Alarm
Service, Itemized Billing and Call Control and Barring, Call Management Services, etc. A

focused approach is being adopted on both the numbers and services front. On the numbers

front, the strategy is segmentation of the sample population; on the service front, a host

of value-adds is on offer apart from the lucrative PCO business.

The company is launching a mass-marketing drive through

mass media, direct marketing, mailers, telemarketing to different segments, and even

specific events conducted to pick up leads. On the pricing front, the company is bound by

the TRAI regulations.There is not much of a differential in prices as compared

to the DoT. The deposit for wireless services is pegged at Rs 6,000 and for wireline is Rs

3,000. However, the recent announcement on revenue sharing by telecom operators is

expected to bring some relief.

Sibling Synergies



There are major areas of synergy between the siblings, Tata Communications and TTL. Some
being harnessed are a few common dealers, common advertising agency, etc. There is scope

for other areas of co-operation too. Says Pani, "Though our corporate budgets are

different, our markets are different, we are looking at working together, including

economies of scale which would bring specific benefits to customer. This could include

basic things like common billing, etc" At a macro level, TTL is also sharing

information with other basic providers on an operating basis. "We recognize our

strengths and also the need for alliance partners," adds Pani.

The Outlook



Though critical issues in terms of deadline, etc., still remain, TTL can contend to the
fact that it is operating in one of the better telecom markets in the country. The kind of

industries setting up base in Hyderabad being predominantly communications-based and the

basic services market growing at a rate of 15-18 percent (DoT estimates), all these should

ensure a large enough market for TTL’s services.

TTL is not seriously anticipating competition as of now.

The targets for the first year are 25,000 to 30,000 subscribers and the revenue projection

Rs 10 crore. The whole project is estimated to cost Rs 4,000 crore of which Hyderabad will

consume one third. At the planned rate of $2 billion investment in the licence period of

15 years, the projected revenues of the company are in the range of



Rs 7,000 crore. On a positive note, this should make TTL the single largest company per
se
, in the state of Andhra Pradesh.