Thursday, 17 August 2017

Telenor, Bharti share secrets of success in India

By Nick Wood , Total Telecom, in Hong Kong
Thursday 18 November 10

Daily performance targets, value-added services help telcos navigate India's turbulent mobile market; Bharti Airtel CEO sees emerging market operators entering global top 10.

When it comes to navigating India's fast-growing but intensely competitive mobile market, Telenor believes average revenue per user is not the most important measure of performance. Instead, the Norway-based telco, which operates in a number of emerging markets in Asia-Pacific including in India as Uninor, is taking it one day at a time. "Long-term business planning in Asia doesn't really work…

When it comes to navigating India's fast-growing but intensely competitive mobile market, Telenor believes average revenue per user is not the most important measure of performance.

Instead, the Norway-based telco, which operates in a number of emerging markets in Asia-Pacific including in India as Uninor, is taking it one day at a time.

"Long-term business planning in Asia doesn't really work," said Sigve Brekke, executive vice president of Telenor and managing director of Uninor.

"We have daily targets – daily subscriber additions, daily revenue targets – a performance driven culture is the way to win," he said. "ARPU is not really an important measure – you need to look at the price per minute and weigh it against the cost per minute."

The Telenor group currently has 195 million subscribers, 90 million of which are based in Asia, Brekke told attendees at Mobile Asia Congress this week.

The first emerging Asian market the telco entered was Bangladesh in 1997, under the Grameenphone brand – a move that raised a few eyebrows at the time, said Brekke, although he pointed out that "today [Grameenphone] has a market capitalisation of almost $6 billion."

However, when it came to entering the Indian mobile market, Telenor didn't take the decision lightly, he said.

"We really thought hard about that – going into India is not just entering another country, it's entering another continent…it's huge," said Brekke.

He commented that in a mobile market as crowded as India's – there are currently 14 operators vying for a share of the market – it is "very difficult to have a sustained competitive advantage [on price]".

Indeed, rather than concentrate solely on pricing, India's biggest mobile operator by subscribers Bharti Airtel remains firmly focused on identifying opportunities to roll out value-added services, such as mobile health and mobile banking.

"50% of our customers don't have bank accounts," said Sanjay Kapoor, CEO of Bharti Airtel's India and South Asian operations.

In one example, he explained that a lot of labourers in India work for daily rates, are paid in cash, but have no bank account in which to keep their money.

"We looked into it and found that the contractors were holding onto their money and charging 10%…this shows the price that people are willing to pay for this kind of service," said Kapoor.

"The models that we have adopted in this part of the world are replicable in other parts of the world that are emerging," he said, encouraging operators to "verticalise their businesses".

Kapoor said that being creative with value-added services will equip emerging market operators with the knowledge and expertise that will see a few of them "make up some of the world's top 10" operators in future.

"We've never promised the people who work with us an easy journey, but we have promised them a great destination at the end," he added.
 

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