Uninor expected to reduce discounts over time: Telenor CFO

Norwegian telecom company Telenor today said its Indian subsidiary Uninor is expected to reduce discounts it offers to customers as it gets accepted as a brand that offers best value in the market.
"We should have mindset also in Uninor like we had in Malaysia where we have really taken the best value proposition ...Overtime eliminated discounts. Still they perceived us as best value in the market," Telenor Group's Chief Financial Officer Richard Olav Aa said.
He was speaking at Capital Markets Day, when companies and institutional investors have face-to-face dialogue.
Uninor in India positions itself as 'Sabse Sasta' (most affordable) brand in India. While there have been frequent tariff increases by other telecom operators in India, Uninor has not made any change in its base calling rates.

"Today Uninor has huge price discount to the top brands but as we build proposition and get that accepted we can take discount down over time... But it depends on lot of factors," the CFO said.
The company has set target to achieve cash flow of about Norwegian Krone (NOK) 28 to 30 billion in which it expects positive contribution from India where it had NOK 1.9 billion negative EBIDTA before other items in fiscal year ended 2012.

"In 2015 when we measure ourselves against NOK 28 to 30 billion we hope to have some positive contribution from India. That will depend lot on compliant development. It will depend lot on general price levels in the market and how we would reduce discount over time," Olav Aa said.

When contacted, company's spokesperson said: "Uninor has maintained that it will always offer the sabse sasta or the lowest tariffs for all basic services in the market. This is not a promotion but a commitment that Uninor will continue to keep and that they are prepared to defend."
Olav Aa said meanwhile that the company expects to become cash flow positive in all six service area - Andhra Pradesh, Gujarat, UP East and West, Bihar and Maharashtra by the end of this year.
"We are on the track to achieve cash flow break even by the end of this year. I remember the six circles that we are in, its only reached 42 per cent of total penetration so there is lots of growth left in these circles. We have a good position and we are perceived as low cost," he added.