TTML - 10 : Sunshine after the Storm

Voice&Data Bureau

05 Jul 2010 05:05 IST

New Update

After a couple of troubled quarters from September to December 2009, after
the major investment for the GSM launch of Tata DOCOMO, Tata Teleservices (Maharashtra),
got back on track with a 19.2% growth in revenues, with an all-time high of Rs
2,300 crore for FY 2009-10, led by the Tata-Quippo deal in early 2010. The 100%
stake sale deal for TFCITL's entire portfolio of 2,535 towers, to be taken over
by Quippo-WTTIL, resulted in a Rs 1,318 crore cash inflow for TTML, and took the
overall portfolio of Tata-Quippo towers to 38,000 nationally.

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TTML wireless subscriber base also grew to 12.34 mn in FY 2009-10, up from
7 mn in FY 2008-09, showing an increase of almost 76.5%. This year again, for
the sixth time, TTML was rated the only congestion free network provider in
Maharashtra and Goa circles by Trai. In the wireline space, TTML is the number
one private wireline operator with over 6,50,000 subscribers. In Mumbai, it
crossed the 75,000 TTML ADSL base, and has been declared the number three
wireless operator with over 4 mn subscribers, while in the rest of Maharashtra
it is the number two wireless operator, with over 7.5 mn subscribers, with a
total market share of 17.6%. TTSL acquired licences for and commenced services
in twelve more telecom circles in addition to its existing six circles and thus
the company`s subscribers now have pan-India mobility. The company has rolled
out CDMA wireless services in 116 new towns in Maharashtra and Goa. TTML is also
the number one rural direct exchange line provider. Its revenue market share has
increased to 10.3% as of Q1 FY 2009-10. Its Cisco Telepresence suites was the
largest public room rollout in India. It was also the first to offer the
pay-per-second billing model.

TTML - 10
Highlights Rated the only congestion free network provider in Maharashtra and Goa circles by Trai Rolled out CDMA wireless services in 116 new towns in Maharashtra and Goa To focus on enterprise and high-value segments

This year, BSNL agreed to share its network infrastructure including
operation and maintenance services, on a shared basis, to both TTSL and TTML. In
December 2009, the company introduced Tata Photon Plus broadband service for
both its prepaid and postpaid subscribers. In March 2010, TTML introduced Tata
Photon Plus wireless broadband service in Pune. In April 2010, Tata Teleservices
(TTML) announced the availability of two innovative solutions-the Tata Photon+
Business Gateway and Tata Photon+ Home Gateway that would cater to the SME and
home segments respectively.

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The number of towers rose from 1,371 in Q3 FY 2008-09, to 2,155 in Q2 FY
2009-10, and TTML also increased its optic fibre network to about 114 units
since the last quarter. Among VAS offerings, TTML's most recent offer was a free
Tata DOCOMO postpaid connection with Photon Plus to all Tata Photon+ EVDO
customers in Mumbai and Maharastra-Goa telecom circles for a limited period,
along with 25% discount on monthly rental of its GSM postpaid services and 100
MB free data usage for the first sixth months. TTML also rose funds of
approximately Rs 8,500 crore ($1.9 bn) in preparation for the 3G auctions. The
company also plans to open a large number of True Value Shoppes to offer better
customer service, especially in rural areas.

The recent Trai recommendations are
anti-competitive

MD, Tata Teleservices Maharashtra,
Anil Sardana

How has been the growth in Mumbai and
Maharashtra?

Extremely good.

What are your 3G plans?

With the 3G auction process now completed, we are gearing up for the
next wave in the Indian telecom space. Our partnership with NTT DOCOMO
places us on a very strong footing, as our Japanese partner is the
technology leader in this space, globally. We look forward to leveraging on
NTT DOCOMO's expertise to get a first mover advantage in the 3G arena. Add
to this the fact that our networks are NGN and, therefore, 3G ready; we are
well positioned to take to the market fast.

What are your views on 4G and LTE adoption in India?

With 3G licensing process delayed several times, India is already behind
other countries which have launched 3G about nine to ten years back. Also,
the regulatory authority is already exploring the possibilities of 4G
networks in India, with a possibility of auctions as early as next year.
Considering the above, we will need to make a choice keeping in mind two
things. One, invest one-time in a technology, which keeps pace with rest of
the world; and two, provide a long term solution with reasonable time for
recovering investments.

What are your views on the proposed price hike for extra 2G spectrum?

Trai's recommendations could lead one to believe that it is in the interest
of developing a more competitive telecom industry. However, a closer reading
of the details reveals that these recommendations are, in many respects,
anti-competitive and will yet again put on hold Tata Teleservices' long run
demand for a level playing field in the Indian telecom industry.

'Push 4 all Mail' services has become quite popular. What other trends
do you forsee with the introduction of 3G?

3G will provide a growth impetus for operators, ushering in the next
level of communications-that's because the 3G promise goes beyond high data
transfer speeds. It enables service providers to reach significantly
improved spectral efficiency, as 3G networks have the capability to service
a far higher number of subscribers than 2G networks. With faster data
speeds, 3G will support data intensive services like full motion video
streaming, videoconferencing and high-speed Internet access on mobile phones
and wireless devices. This will give a fillip to the world of value added
services, opening up a world of customized applications that will cater to
individual needs and desires. Consequently, a plethora of high quality and
low-cost voice and fun services for subscribers are bound to emerge.

You recently launched the Tata Walky FM. How has this product been
doing so far, and what is the scope for it in India?

The response has been wonderful, as was with Tata Walky, when it was
launched. We are a category leader in the fixed wireless telephony space.

Tata DOCOMO has taken off well. What is the game changer?

In mid 2009, we unveiled our GSM brand under the name Tata DOCOMO
, and
just a fortnight later we launched our GSM services, beginning with South
India. In just eleven months since the launch, TATA DOCOMO GSM services have
been launched in seventeen circles so far, and we expect to complete the
national rollout soon. It has been heartening to see the tremendous faith
shown by our subscribers, and while the numbers speak for themselves, a far
greater validation is the entire industry following in our footsteps and
introducing the per-second pulse, a Tata DOCOMO innovation that proved to be
a game changer.

The future looks bright, and with it are TTML's plans that cover a host of
its services. The company intends to concentrate primarily on the wireless
segment-fixed and mobile-and increase its thrust on prepaid products. It will
look at minimal incremental capex for GSM through reuse of CDMA infrastructure,
and has already reused 90% of CDMA sites. TTML is also looking to maximize
spectrum utilization, maintain market leadership across Mumbai and Maharashtra,
focus on enterprise and high-value segments and target customer churn from
competitors as well as first time users. With a strong belief that MNP will aid
subscriber migration, the company aims to build the Tata DOCOMO brand, build a
3G-ready network, leverage optic fiber to offer a wider range of services, and
develop the Wi-Fi network in Mumbai to reduce last mile costs.