Telecom firms to raise retail presence despite slowdown

The Indian telecom firms are increasing their retail presence in the country, despite the looming threat of recession, and are expected to invest around Rs 1,000-1,500 crore over the next two years.

The industry estimates the robust subscriber addition of 9 million per month to continue, if not increase, for the next two years. The cost cutting efforts by corporates, like restricting travel, would also be beneficial to the industry.

“We expect the retail sector to buck the trend, even though there will be a minor impact in the short-term due to the initial sentiment of the financial crisis. Looking ahead, we see the robust growth of the industry to continue, which would mainly come from the rural and semi-urban sectors,” HotSpot CEO Sanjeev Mahajan told Business Standard.

HotSpot, the multi-brand technology retail chain of the Spice group, will increase its presence to around 3,000 outlets in the next two years. At present, the company has 432 stores in the country.

Similarly, MobileStore – Essar Group’s handset and telecom services retailing firm – is planning to launch 2,500 stores by March 2010 in the next three years. This is almost double of the company’s 1,300 stores in the country. It’s also planning to increase presence to around 500 cities, with thrust on major 'B’ and 'C’ towns, from the present 200 cities by 2010.

“Mobile phones are no more a luxury, but a necessity. Most customers like to upgrade their phones once in 6-8 months leading to continuous demand. We are seeing negligible impact on the telecom industry - both handsets and new connections - due to the economic slowdown,” said MobileStore CEO Rajiv Agarwal.