Uninor mobile services launched in seven circles

Uninor launched its mobiles services in India today. From today, Uninor’s mobile network coverage will be available in UP east and West, Karnataka, Kerala, Orissa, Bihar and Jharkhand.
The company said that it has tied up roaming agreements with operators in areas where it does not have coverage now. Out of the 22 telecom circles, Uninor has launched its mobile telecom operations in 7 circles. Uninor holds licence to launch services in all 22 circles, and has spectrum for the launch in all circles except Delhi.
Uninor has not joined the latest mobile tariff war in India. Mobile operators in India have started offering per-second billing plans, which bills you according to the exact number of seconds on the phone. Till recently, mobile operators in India used to follow the pulse system.

Call charges on Uninor

Uninor is continuing the old practice of pulse system. Uninor announced that local calls on its mobile network will cost 29 paise per minute. STD calls will be charged at 49 paise per minute. As per the Talkmore@29p plan, there will be a call setup charge of 39 paisa per call, while in Callmore@29p, there will be a daily rental of Rs 2. For details about Uninor’s call pricing and tariffs, refer to the Uninor India website.
Uninor is offering mobile services in the GSM spectrum. Uninor SIM cards will be available starting today across its wide network.
Uninor has launched print and TV advertisements with the tagline “Ab Mera Number Hain,” projecting an image of someone whose time has come.
“With launch in seven circles and roaming agreements in place for the rest, we have started our service in India on day one as a pan-Indian national operator. This is a proud achievement of a committed and talented team. While our launch today is indeed a milestone in a longer journey to become a significant operator in India, we are delighted to have made such a strong start,” said Stein-Erik Vellan, Managing Director of Uninor.
Uninor is a joint venture of Norway’s Telenor and India’s Unitech Wireless. Unitech Wireless, which won spectrum and licence for telecom operations later sold a majority stake to Telenor. As of now, Telenor is majority owner of Uninor. In March, Telenor and Unitech Wireless had finalised the financial transaction to launch mobile operations in India. Uninor has been able to launch the mobile services in a short period of time with several infrastructure sharing agreements and vast outsourcing.

Uninor said in a press release that this the single-largest single day launch of telecom operations. The simultaneous rollout of services in the seven circles covers a population of 600 million.
Uninor currently has 1800 employees, and has 11 regional offices. The Uninor mobile SIM cards will be available at 210,000 retail outlets, 1000 exclusive Uninor distributors, and 17 exclusive Uninor-owned shops and 50 exclusive Uninor franchisee shops.
Uninor is hoping to gain a marketshare of 8% in the first 10 years of its operation in India. In the first five years, it expects a loss of Rs 15,500 crore.
More and more foreign telecom companies have set eyes on India, which is a booming market for mobile communication. The leading telecom providers in India are Airtel, Reliance Communications, Tata Indicom, Tata DoCoMo, BSNL, MTNL, Aircel, Vodafone, Loop Mobile, MTS and Idea Cellular.

Why are newer Indian telecom companies not happy?

Telecommunication has been the second fastest growing sector (I.T being the first) in last 15 years. Airtel who started in 1995 is today one of the Asia’s largest telecom operator. Companies like Reliance, Hutch (now Vodafone) also have grown to new heights.
If biggies like them are happy with the growth, why aren’t new entrants like Uninor, S-Tel, Etilsat making money?

The spark started after Norwegian telecom operator Telenor asked its Uninor management ‘Quit India’ as they can no longer bear so high operating losses. Uninor made losses more than USD 340 million in past six months
The 2G spectrum was awarded to these operators at throwaway prices. When time has come to earn revenues, these entrants are not even able to breakeven the fees they paid for the license. The price war with the biggies is costing them dearly.
The new players had overestimated the Indian telecom sector. The present ARPUs are not even able to cover cost of acquiring a customer. The cost of acquiring new customers is roughly Rs. 250 to 300. The latest TRAI report says that majority of customers have an ARPU of Rs. 80 and they’re just 20% of the overall subscribers.

The problem aggravates with the fact that high ARPU customers are with Big Telcos and the customers acquired by the new entrants are low ARPU subscribers who will not think twice before changing the operator after the MNP is implemented.

Why don’t these companies go after consolidation?

These new entrants have no customer base, no worthy assets, just spectrum (that too 2G, none of the small operators have been awarded any 3G circle). The buyer can only be allowed to keep certain proportion of spectrum in the same circle or else it has to surrender. So consolidating with another operator in same circle is of no use.
The only way they have is surrendering their 4.4MHz spectrum to the TRAI. But why will TRAI think of returning the license fee. Does it mean that Indian telecom sector saturated? Or can Mobile Number Portability (MNP), 3G, growth of mobile VAS make a difference?
So, is this end of the road for these newer, smaller Indian Telecom Operators ?