New Delhi: Unitech Wireless Ltd’s new managing director Stein Eric Vellan, who has been in India for around six months now, expects to launch operations by the latter part of the fourth quarter of the calendar year under the brand name Uninor. Vellan comes to India after a two and half years as the chief executive officer of Telenor ASA’s operations in Serbia. Norway’s Telenor owns a 67.2% stake in the company founded by real estate developer Unitech Ltd. In an interview, Vellan talks of the challenges in doing business in India, the new brand name and what will differentiate Telenor’s operations from its rivals in the world’s fastest-growing and second largest telecom market. Edited excerpts:
What is the story behind the new brand and what is the positioning?
Opportunity knocks: Stein Eric Vellan says Telenor is very optimistic about India. Ramesh Pathania / Mint
The story behind the brand is two strong partners coming together heading a joint venture. It’s up to us to fill that brand (Uninor) with values. These values have been clearly chosen for the company that will drive us in our everyday life. You see a brand that is different, it’s going to be cultural, vibrant and it’s going to change a lot.
I think that’s another important thing—that the ability to handle change, especially in a competitive environment like India, will lead to success in the future.
What will the key differentiator between you and the rest of the telecom companies in India?
First of all, we would have to start with the company itself. Uninor will be based upon clear values and these values will drive us in our everyday business life. We say that we want to be respectful, which means we treat each other with respect inside the company and that should be transferred to treating the customers outside the company with respect.
We want to be simple because a lot of the operators can talk of the challenges when it comes to technology and all the other areas. I think it can be simple like everything in life—you can over-complicate or you can make it simple. If you truly understand something and you know how to do things, you can make it simple. We want to take that simplicity out to the customer front and have them understand that being a customer of Uninor, it’s going to be simple. Another aspect is that we will keep promises.
When you come into a market like India, you see colours everywhere, you see smiling people and you take that and you can transfer it into, and build, a company that has a value that is inspiring as well. In the end, you will see that maybe you will be inspiring the customers.
These elements are not that easily copied, that’s what the customer is going to feel.
We want to be customer-centric in everything that we do but that has to be proven, so then it starts with how you build your company, and then we see how the customer sees this communication and experiences the distribution. It’s all going to happen through the value that this company has built in.
What are the main challenges of doing business in India? What about things like regulatory policy?
One day in India is like a week in Europe. Things are moving extremely fast. The glass is half full or half empty. In each country that you enter there will be challenges. I think it’s more about looking at the opportunities.
The opportunity in India is growth in GDP (gross domestic product) as well as subscribers but mainly revenues. India is a country that is quickly developing and it will get more and more in the center of the world’s attention in many ways.
We will probably bring in some new thinking and learning into this part of the world and at the same time we will get a lot of learning in such a competitive market like India.
In many aspects, adhering to the the regulatory environment in any country is always a challenge. You have to adapt to local rules. Here, the regulatory environment is much more developed than in Serbia. One has to understand that the people in charge of regulatory affairs need to take a look into a lot of things and it will take a certain amount of time to do the things in a proper way.
We have to respect that. We are still awaiting the formal approval from the FIPB (Foreign Investment Promotion Board).
To run a mobile company or any company for that matter, you have to make scenarios and you have to plan for it and also have different options. Don’t lock yourself in one direction.
What are your plans for India?
India has still not even reached a 50% penetration level and that presents a huge opportunity as many of the subscribers are multiple SIM (subscriber identity module) holders. When one looks at the Indian market, one tends to talk about subscribers—that is not the only thing. That is only one part of it. What you live by is your revenue. The revenue predictions for India show a strong, strong growth—there is a lot of opportunity given the GDP growth among other markets, making Telenor very optimistic about the India opportunity.
What we have said is that in three years we will be Ebitda (earnings before interest, taxes, depreciation, and amortization) positive and in five years we will be cash flow positive and we still believe in that because of our business model.
We call it the telco of the next decade because it is based on outsourcing which gives us a lot of flexibility. Where else can you do outsourcing than in India. Our whole business model is built upon that.
In the end, it’s about the customer. Its about stopping focusing on how many towers you have and how is the technology and it’s more about reaching the end customer— that’s what Uninor is all about.
It will flavour who we recruit. We will look for more people from the FMCG sector than from the traditional telco business.
We are looking at 8% of the market by 2018. For 3G, we are not going pan-India. We are currently putting our strategy together and put that forward to our board of directors and then we will see how 3G goes. We will use our learnings from a lot of other markets where we have 3G operations to put together our strategy.