`We are in serious discussions for a foreign ally`

Q&A: RAVI SHARMA

Consumer durables major Videocon Industries’ subsidiary Datacom Solutions, which has received telecom licences to begin pan-India operations, is planning to commence network rollout starting August 15 and services by year-end, becoming one of the first newcomers to launch operations. In an interview with Rajesh S Kurup, Datacom Solutions’ newly appointed Chief Executive Officer Ravi Sharma details the company’s plans, including leveraging Videocon’s 40,000-strong retail network. Excerpts:

How are the company’s preparations for the rollout of mobile services coming along?

On the network side, we have floated a request for proposal (RFP) for 70 million lines and received responses from six major players - Ericsson, Nokia-Siemens, ZTE, Alcatel-Lucent, Huwaei and Nortel. The 70 million lines will fulfil our requirement of 50 million customers in the next five years with some free capacity on the network. We have also received offers for Intelligent Network (IN) platforms.

On the IT front, we are looking at a revenue-sharing model, a first of its kind, for which we have received five bids from IT suppliers. We have also had a lot of work done on passive infrastructure.

We are confident of rolling out network on August 15 and starting services with the Tamil Nadu circle on December 15, 2008. Services will be extended to remaining circles within the next year.

You had also begun recruiting people. Is the whole team in place?

The top management team is already in place with our CTO Krishnan from BSNL, CIO Partho Banerjee from IBM, Chief Supply Officer DP Singh from Alcatel-Lucent, Chief CSD Arun Vohra from Airtel and CFO from Ingram Micro. We have more than 200 people on our pay rolls right now and plan to have 100 more on board by August-end. The target for the year-end is 800.

On the distribution front, would you be using Videocon’s existing network?

In addition to conventional retail formats, we will also utilise Videocon’s distribution channel, which is spread over 40,000 dealers in the country with 70 per cent of them in rural areas. We will also use Videocon’s retail network Next and music store chain Planet M to promote our services.

What is the capex required for the next 5 years?

On the electronics front, we require a capex of around $3 billion (around Rs 13,000 crore) over the next 3 years to cover 50 million subscribers. On the passive infrastructure front, the figure will depend on the extent of sharing, which is still under evaluation.

Will the ongoing issue with the Nahata group, which holds a 36 per cent stake in Datacom, derail the rollout plans?

The issue is between the shareholders (Venugopal Dhoot, chairman of Videocon Industries and Mahendra Nahata, chairman, Himachal Futuristic Communications) and will not impact the working of the company. We will continue to proceed according to our plans, while the Videocon group will arrange the finances for the operations.

We believe you are in talks with global telecom majors like AT&T and Etisalat for monetary and technological support?  

Many international telecom companies for tie-ups have approached us and we would take a decision within the next six weeks. We are not looking for mere investments, but what value they bring to the table - like the scalable process, enterprise products and international reach. I would not like to name the companies, but, yes we are in serious discussions with some of them.