Loop Mobile recently concluded 15 years of operations. Though it operates only in the Mumbai circle, the company is eyeing a larger pie, with various initiatives. Sandip Basu, CEO, shares his plans with Katya Naidu. Edited excerpts:
There have been reports recently that the Comptroller & Auditor General said Loop did not fulfill the eligibility criteria to get a pan-India licence.
All I can say is that we are on the right side of the law. We would not like to make any further comments.
Loop Telecom has a pan-India licence but you have operations only in Mumbai. When do you launch in other circles?
We have a pan-India licence and would be doing our rollouts. We have rolled out as per regulations in all the circles and testing is currently on in all.
Almost every telecom operator has a presence in Mumbai. Are you happy with your performance?
We have just finished one of our best quarters, ending September, generating our highest revenue ever. The first quarter of this financial year saw one of our best growths. We saw growth of 8.5 per cent in service revenue on a quarter on quarter basis. This has come against a decline in the Mumbai market, of eight per cent overall; incumbent operators declined by 10 per cent.
We have three million subscribers in Mumbai and some of the best high net worth individuals and top corporate accounts as well. The life expectancy of a customer on a mobile network is four-five years. Our endeavour is to prolong it.
We will look at a bigger pie in the market, and hope to get 15 per cent market share in the near future. Mumbai as a market has a penetration of 100-plus per cent and it is a churn market. Some new entrants have come up with new offers and because of that, a multi-SIM element has come into the market. Consumers are switching for the free talk time and free data.
We want to look at the corporate and high-end market and want to stay away from the use-and-throw guys. Use-and-throw guys are rotations for everyone. We are giving our subscribers more value for services and would want to increase Arpu (average revenue per user).
Since every other operator is reducing rates, how do you plan to give more value to your consumer?
One of the basic things in this business is good network quality. In the current financial year, we have plans of investing $100 million (Rs 445 crore) and a substantial part of it has already happened. Our primary area of focus has been our network and we have upgraded and augmented more than 1,200 network sites across Bombay, taking our tally to more than 2,000.
There are other areas, like SMSing. With the festive season coming in, we upgraded our SMS capacity to 2,000 SMSes per second. We are upgrading our IVR (Interactive Voice Response), so that we are able to attend subscriber calls in 10 seconds even as Trai (the sector regulator) permits 60 seconds. We hope the customer satisfaction index goes up with these initiatives.
Loop has not participated in the recent bidding for 3G spectrum. As all the incumbents will offer 3G services, will the company lag?
We have not particpated in the bidding but we are very much in the 3G game. We would look at giving our consumers 3G services, either directly or in a different manner. There are various possibilities. MTNL has recently circulated expression of interest for 3G spectrum.
How do you plan to increase the Arpu of your customers?
If you look at the Arpu of India as on date, we spend an average of four per cent of disposable income for telecom needs. That is the right benchmark across the world. But other parts of the wallet are completely untapped, like the transaction part and entertainment part. Gaming is coming in a big way and will take a certain amount of Arpu. Mobile commerce and money transfers will also come in. An average subscriber should be spending around Rs 250 as compared to what you get now, which is around Rs 150.
What other options are available to increase revenues?
There are new avenues like mobile marketing, which has huge potential and can open new areas of revenue. Consumers, too, would know about latest offers and get location-based services. These services will become very important marketing tools which various organisations would like to use.For telecom companies, it would be a revenue-share model. If there is an advertiser who likes to push his promotion, instead of going through print or other media, he would go for mobility. There are various options like video streaming, tickers or a branding. Mobile marketing is a $6-billion market globally and I don't see why we would be away from it.
Are you looking at any innovative value-added services?
Our focus is now to go into data and that is where our investments in networks had paid off. Today, we have one of the best download speeds in 2G. Now, we would like to promote various content in the data space.
We have applications like call filter, reply all SMS, etc. We are looking to offer smart mail, which we plan to get off the ground soon. It is somewhat like a push mail for consumers who do not have high-end phones or a BlackBerry.
There have been talks about a possible stake sale. Is that an option?
In the telecom space, the only thing which is permanent is M&A (merger and acquisition). We can't say this company is not going to merge, get acquired or acquire. We, like anyone else, would like to have a financial partner. We look for partnerships because a partner brings in some value or equity. We can fund our own plans, but partner search is something which goes on. But there are some regulatory changes which have to happen, before the environment becomes a little better for mergers and acquisitions in the telecom space.
