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(Interview Transcript)
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Reliance Communications has added 1.4 million subscribers in May. SP Shukla, President - Personal Business has said that all three segments have contributed to the growth. While, growth fluctuated between six and seven million on post paid plans. The post-paid segments benefited from zero-roaming scheme.
Depending on growth, they expect to exceed May numbers by a wide margin. The May ARPUS has been close to April figures, and they believe ARPUS will remian stable. They are also planning another initiative in June. The company is confident of having a dominant market share of over 20-23% in FY08.
Excerpts from CNBC-TV18's exclusive interview with SP Shukla...
Q: Can you break up that subscriber addition with what you have done on the 777 plan?
A: It is difficult to break up on handsets because as they go with SIM cards, the company will not always know who bought which handset. I can only say that we have benefited from our multi-segment approach.
Q: Could you tell us exactly what part of additional subscribers in the month of May came from these plans at all?
A: We had three major initiatives taken during May.
One on roaming, one on colour phones at 1234 and one black and white phones at 777.
One at high-end customers, one at middle-end customers and one at economy customers; and all these three registered strong growth. Handset-wise, it is difficult to say; because of the SIM card you are opaque to the handset, you don’t know which handset the customer is buying and who is upgrading but in the post paid segment we were benefiting a lot from zero roam schemes
Q: All the three plans did not come at start of May; it came at various points in the month. What would you say would be the impact in the month of June itself, would it be much better therefore than 1.4 million?
A: Yes, I am confident of that. But it is difficult to say because it depends on the growth of a segment in any particular month and the growth has been fluctuating for the sector as a whole, between 6-7 million of late. So if June registers a strong growth for the sector as a whole, then I am confident that we will be exceeding our May numbers by a wide margin.
Q: Would you have any numbers as to the ARPUs considering that these would be plans where you are targeting slightly low-end customers?
A: That’s is what I have been referring to - that in post-paid plans, there has been strong growth thanks to the roaming initiative whereas most of the 77(7) customers will be going to the pre-paid plan.
Q: In general what have been the ARPUs being for the month of May compared to the previous month?
A: Steady; which itself is an achievement because in telecom sector, YoY ARPUs decline for all companies in all countries.
Q: You have a number for the month of May?
A: Number for the month of May will be close to what we have had in April. On QoQ, ARPUs do not fluctuate much. They fluctuate by Rs 3-4 up and down.
Q: What are you all as a strategy prepared in terms of a likely impact on the ARPUs because of these plans for the entire quarter?
A: We believe that ARPUs will remain stable. We will add some high value customers who will come in on roaming initiative and colour phone initiatives because we have recently launched our FM speakerphone, which is at Rs 1,888, and there will be customers who will come at the low-end. Whole objective of an operator is to get a balance mix of the customers so that ARPUs can be maintained.
Q: Are there any other plans up your sleeve that maybe announced in the subsequent quarter or subsequent month in fact?
A: Yes, during this month, there will be at least one more major initiative.
Q: What is the latest on the selling of your stake in the tower business?
A: That is now a completely demerged business and a separate company. It will be appropriate that tower company people speak on that.
Q: What do you expect in terms of subscriber additions for the whole year?
A: We are confident that we will have a dominant market share and we will be running in excess of 22-23% market share. Now the whole thing depends upon how much is the sector growth itself and whether the sector grows 7 million a month or 8 million a month or more.
We believe that towards the end of the year which means Q4, the growth will definitely be in excess of 8 million a month for the industry as a whole and that should allow the dominant players to be operating to 2 million mark.
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