Arun 795 Report post Posted October 8, 2009 Verbatim transcript of Anil Sardana’s exclusive interview on CNBC-TV18 Thursday, October 08, 2009 Watch Video Q: This [per-second billing] move of your company. How do you see it playing out? Do you think that you are going to see a contraction of margins for sometime but things will play out? What kind of a timetable are you looking at in terms of dipping of margins and their final compensation by improved revenues? A: This is something that is very well thought through innovation that we brought to the customer. It has been brought in because there was tremendous amount of cluster that the customer was seeing and there was tremendous confusion for customer to choose their package before every month starts in terms of which offer the best rate for local calls, which offer is the best rate for STD or for SMS. We said: let’s bring something that is true to our value system, which is relevant and also transparent and that’s how this whole concept of pay per use was brought in. So therefore I guess today everybody is trying to talk about pay per second but this is a part of the larger goal that we set for ourselves that we will only work on pay per use as a part of our Tata DOCOMO launches. The reason why pay per second was done was to, simply put, make sure people don’t pay for call drops, for what they haven’t used and we have got better average revenue per user (ARPU) that incrementally any new other operator is able to get. Because there is perhaps a fear that one is charging for something that is not due to us — if some operators believe that the calls are being charged for what is not due to them and the customer is overpaying because the customer is ignorant about what it is being paid for, that could cause tremendous backlashes to some. But in whole, sincerity and the fact that this is an innovation, which is a win for a customer should be actually treated as a great innovation. Q: In CDMA too, you had plan of Rs 1 per call, in case of STD Rs 3 per call, whatever the duration of the call. There is some criticism that that was mainly because you had high unutilised bandwidth and also capacity in your code division multiple access (CDMA) network. Could you respond to that? A: I guess the criticism has to be the job of people who cannot match you. The fact was that this was based on the fact that for last four quarters continuously, TRAI rates our CDMA network to be the best in India. When it was treated and called to be the best, the only way that it can transactionally be brought in front of the customer is to make sure that the length of call could be longer. If there is call drops in the other networks how could they make pay per call concept. So today we have seen that since the time we have launched pay per call, the call duration on an average has stayed between 2.5 to 3.2 minutes. So if it is that same concept as what the calls are normally, there it makes great sense to have a local call at Rs 1 and STD call at Rs 3. The only point that we have taken away from customer is the fear of time inline with what we talk about pay per use on other side. But most important part is how you transact a good network with the customer? You can transact a good network quality with the customer only through means and which you actually prove to the customer that you can make a lengthy call. Q: What I want to know is that is this more profit making. I am sure that it would be making losses right now. Do you think volumes will compensate for that? A: You did not see the analysis of several of the analysts who came back and said this is hugely profit making. The effective rate of this is better than the effective rate that we had before. Q: You will make margins in this — you will make good profit margins in this? A: Absolutely we make margins and we make effective rate, which is better than the effective rate that you make in anything like 60-75 paise per call. Q: You are confident of cutting losses in the coming year i.e. in the current year FY10? A: We are no more in the loss paradigm. We are strongly EBITDA (earnings before interest, taxes, depreciation and amortization) positive, we are cash positive. Those times have already gone. Q: There is a market buzz that there is a proposal to merge Tata Teleservices Ltd (TTSL) and Tata Teleservices (Maharashtra) Ltd (TTML) via Quippo Telecom, any truth to that, if you could comment on that? A: We have already merged Quippo Telecom’s towers into our company called Wireless Tata Tele Info Services Ltd (WTTIL). TTML and TTSL are two different entities, these are wireless operators and TTML is a listed company, so I don’t want to comment on that aspect. Q: There is also buzz on Quippo Telecom bidding for Aircel’s tower operations, any progress on that? A: WTTIL and Quippo Telecom combined, which is what WTTIL is now, have been qualified for the Aircel towers and we are certainly looking at that. Share this post Link to post Share on other sites
