Few telecom wrinkles still pending: Aditya Birla Grp

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In a CNBC-TV18 exclusive, the chairman of the Aditya Birla Group , Kumar Mangalam Birla reiterated the group's commitment to telecom. He said its retail strategy was being reworked and that it was looking forward to a foray into the banking space.

Below is a verbatim transcript of his exclusive interview with CNBC-TV18's Shereen Bhan. For complete details watch the accompanying video.

Q: Are you still gung-ho about the telecom space after all the noise in this sector?

A: If you just put aside all that's happening in the telecom space right now which is unfortunate. As a business it's a great business to be in. For example, Idea has 90 million customers which is a huge franchise. We sell about a billion minutes a day which is huge. That's amongst the five largest sellers of minutes per day in the world. So, it's a very interesting space.

Q: Are you still committed to it, given the fact that you always had apprehensions of operating in regulated sectors and there can't be a more regulated sector than telecom in the country at this point in time?

A: Yes but it's the tail end now that's left in the telecom sector as far as regulation is concerned. A big overhang is now out of the way. You have a few policy issues like say M&A, which is a big overhang in the telecom space, but you have a lot of regulatory issues that are now out way. So it becomes a much less regulated sector in that sense.

Q: Have you been disappointed with your performance on the retail business as well?

A: No, we aren't disappointed but it is a much more difficult business than it seems from the outside.

Q: Have you recalibrated your plans for it?

A: We have. For example, we have from wanting to be in multiple formats we have now decided that we want to be in two formats. We want to be in the supermarket format and the hypermarket format. We think there is enough in there, in terms of the investment required, in terms of the talent required, in terms of the scale that you can build out of the retail business, for us to want to do other formats.

Q: Why haven't you thought about bringing in a foreign partner as a strategic investor onboard as has been the case with most other retail players?

A: Given the large localization element in the retail business, the only thing a foreign partner can really bring to the table is finance. I don't think there is anything else really.

Q: You are not open to bringing somebody onboard at this point in time?

A: Not in this point in time. If we find ourselves in a situation where finance becomes a very important issue, it's a little difficult to predict with the retail industry, but one isn't averse to that. The only reason why one would want a foreign partner is for finance.

Q: It is only for the money, is it?

A: Yes. I don't think there is too much of a knowledge transfer that can necessarily happen.

Q: If indeed the RBI does go ahead and give corporate houses the ability to get a banking license, is this going to be one of those areas that you would like to fast track your expansion and growth?

A: Absolutely. We are in the financial services space. We are into insurance, we are in the mutual fund business and are now into private equity distribution. A bank fits in very nicely there. It's a very natural extension of the larger portfolio of financial service businesses.

The need for more banks in India is very apparent if you want to grow at 9% per annum. In terms of finance and numbers, that is something that we understand very well. Backed by all of that is the fact that we are a brand that is very highly trusted in this country.

Q: What is the bank going to be called if indeed you do get the banking license? Do you have a name for it?

A: Yes, it will be something like The Aditya Birla Bank. That's as creative as I can get at this point in time.

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