Telenor Proves The Efficacy of Offering Minimal Mobile Services And Breaks Even

by Paul Joseph on December 18, 2013 · 0 comments

Norwegian Telecom giant Telenor , who has had a very a troubled relation with India, has surprised the Telecom Segment by not just surviving in the tumultuous times, but growing financially. Telenor , with its new partner, Mumbai-based Lakshdeep Investments & Finance has broken even in one year of operations. Five of its six telecom circles have turned EBITDA (Earnings Before Interest, Tax, Depreciation And Amortization) positive, while the sixth will get there by the end of this month. It is interesting to note the ways in which the company has stayed its course by offering simpler solutions to its customers, while other companies are progressing via a completely different path. What has Telenor done differently? It is ironic that while other companies like Vodafone, Airtel, Reliance and others are trying to jack-up revenues via the emerging trend of enhanced data consumption, Telenor, with its new company Telewings, has steadfastly offered basic Telecommunications Services to its customers. Telewings has been offering basic voice and SMS services. However, it has been doing the same at the lowest possible price points that other companies haven’t been able to successfully compete with. Additionally, the company is playing a very selective game, by being active in a few regions , instead of striving to go pan–India, explained, Sigve Brekke, Head of Telenor Group’s Asia operations and acting CEO of Uninor, “ We take India not as a country, but as a continent. So, we don’t have to be present pan-India. Even the big telcos are not successful in all circles. They are successful in a few circles. So, the competition is circle-based and not pan-India ,” Can Uninor continue to ignore the impact of Data? Here too, the company has interesting plans, quipped Brekke, “ The data opportunity and data potential is undeniable.  The difference is that, much like with Voice, in Data too, we see tremendous potential for Basic Services. This is the segment that will truly explode. ” The company hasn’t participated in expensive 3G or 4G auctions, but instead, will offer internet services via low end 2G services as ‘Basic Connectivity’ options, continued Brekke, “ The internet needs – social networking, browsing, email and listening to music -of mobile subscribers are not dependent on high-end and expensive platforms like 3G and 4G. Uninor’s model will help the company extend the same unique positioning of affordability to data as well. ” By staying focused on offering ultra-low tariffs, Uninor has intelligently taken advantage of the Dual SIM phenomenon, wherein telecom subscribers routinely maintain two SIMs. At present Uninor SIM is the one customers use to make Voice Calls and SMS. Do you think the company will be able to continue making profits with this simplistic formula? Looking For A Social Media Agency?? – Contact WATConsult – India’s Leading Social Media Agency

[via WATBlog.com – Web, Advertising and Technology Blog in India]

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