Sistema Shyam Teleservices Ltd (SSTL), the JV between Russia’s Sistema and Shyam Teleservices, just completed a year in India. It believes in reasonable, organic growth, but isn’t “allergic” to consolidation, Vsevolod Rozanov, president and CEO, told DNA in an interview. Excerpts:
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It was extremely exciting. I don’t think anywhere else in the world such opportunity exists like it does in India. The competitive atmosphere in this country makes everyone run. It was a very rewarding experience. We were the first Russian company in the consumer business segment to dare to go out. India is one of the most Russia-friendly markets.Another important thing is India was a fantastic place to be in at the time of global meltdown.
Would you like to change any of your strategies, now that you have experienced the Indian market for one year?
We already changed our strategy last year. Initially, we were focused on pure mass market play with very simple tariff plans. We realised that it was hard to get even with the scale. We changed the strategy, and started focusing additionally on data. Without the data offering, it was hard to justify the cost with the current level of arpu (average revenue per user). So, I feel data is the future for us and for all markets.
Do you see consolidation in the telecom landscape of India? And in such a scenario, could you become a target for consolidation?
It’s the position of the regulator that will be the key driver for consolidation. If there is any consolidation, I clearly see that we could be a target. But, MTS (the brand used by SSTL) is a very long-term player in India.
Sistema was trying to enter the Indian market for six years. The first discussions happened in January 2003… Therefore, we are not here to be a target. Our position is very simple —- we believe in reasonable, standalone organic growth. But if somebody approaches us, we will of course consider. MTS (the telecom arm of the Sistema group in Russia) itself is a creation of a merger and acquisition (M&A). So, there is no allergy to it or anything… But, as of now, we are perfectly fine, working as we do now.
Are you confident of meeting SSTL’s target of pan-India operations by the end of 2010?
Whatever we were planning to do, we will do. Since we are focused on data, the key target for us is to double the number of mobile broadband cities.
But, are you planning to be commercially active across all 22 circles in the country by the end of this year?
This is not sacrosanct for me.
Do you have any subscriber target in mind for the company?
Not in mind, and not in the Budget. The key target that I have in mind, which I cannot announce to you, is the financial and the shareholder interest. That I think is quite reasonable, otherwise it’s very difficult to stay rational in this kind of turmoil that we have seen in the market.
What has been the biggest challenge for you in the Indian market?
There are two challenges. One is the ability to differentiate among so many players; second and more important is execution.
Do you think third generation (3G) telecom services will be successful in India?
Yes, I think it would be successful. There are some fundamental reasons to believe that mobile broadband could be successful in India. You can already get 3G like experience from us and other CDMA (code division multiple access) players.
Your company could have applied for participating in the broadband wireless access (BWA) auction slated for April. Why didn’t you?
Yes, we thought of that. But since we are already offering very reasonable speed, and going forward we hope that the regulator would come up with norms on 3G and 4G for CDMA players, we stayed out. We are in discussion, through CDMA association Auspi, with the regulator on this.
What does the proposed deal between Bharti and Zain indicate for the Indian telecom market?
I don’t know how much it will help the Indian market. But, the magnitude of this deal shows that Indian telecom operators are becoming global players. It shows the level of development of the industry.
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