Videocon Telecom, the tenth-largest service provider in India, has told Light Reading it aims to become the leader in the market for communications offerings that are not based on the use of mobile spectrum.
“We are not incumbent in GSM and we will always be challenger but we can be a leading player in the new initiatives,” says Arvind Bali, Videocon Telecommunications Ltd. ‘s CEO. “So we would like to take a lead in non-spectrum business like FTTH, WiFi hotspots, carrier-grade WiFi and surveillance systems. We are looking at all these verticals.”
Videocon has set up a new Emerging Business unit in Punjab to focus on these opportunities and it plans to extend the unit to other regions soon. It has already rolled out some carrier-grade WiFi hotspots in Punjab and aims to deploy hotspots in Haryana and Himachal Pradesh as well.
But Bali concedes that a business model has yet to emerge for WiFi and that it will be some time before Videocon is able to make a profit from this initiative. Other operators — such as Tata Teleservices Ltd. and yet-to-launch Reliance Jio — are also focusing on WiFi.
Nevertheless, having recently reported overall revenues of about 20 billion Indian rupees ($314 million) for the recent financial year, Videocon is anticipating strong growth in 2015. “We will touch INR30 billion [$471 million] this year,” says Bali. “We will not need any EBIDTA support from the Group [parent company Videocon Group] this year. We will be EBIDTA positive this year.”
Videocon has had to rebuild over the past three years, having lost concessions in 2012 when India’s Supreme Court canceled 122 telecom licenses in total. Today, it serves just 0.7% of the mobile market and holds permits for only seven circles.
The company’s biggest market remains Punjab, where it operates under the Quadrant Televentures brand and serves a total of 2.7 million subscribers, according to March data from the Telecom Regulatory Authority of India. It plans to invest another INR5.25 billion ($82.4 million) in Punjab over the next five years.
Besides expanding in Punjab, Videocon also intends to launch 4G services in the circles of Uttar Pradesh (West) and Bihar in the next six to eight months.
“We have constraints in spectrum,” notes Bali. “We would be offering 4G in a few clusters where we see the market for these kinds of services. The rural segment will continue to be served on 2.5G and 2.75G.”
Videocon picked up a pan-India Internet service provider (ISP) license earlier this year and has already rolled out ISP services in parts of Haryana and Baddi. Its focus here is on launching in circles where it also holds GSM concessions before moving on to other areas. The operator plans to spend more than INR3 billion (US$47 million) on rollout in the seven circles where it holds mobile licenses.
Bali refused to comment on recent media speculation that Videocon has been in talks with Uninor , a mobile operator controlled by Norway’s Telenor. “In the last two years, every company [telco] seems to be either acquiring or getting acquired in India,” he laughs.
Experts have predicted that consolidation is the only way forward for the Indian market.
Last year the industry was also a-buzz with talk of Reliance Jio acquiring Videocon.