Can Uninor Sustain in India ?

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Can Uninor Sustain in IndiaFollowing the Supreme Court’s verdict to cancel 122 2G mobile licenses, Indian telecom market is going through jeopardy. STel and Cheers already shut down their services and asked their customers to opt for other operators via MNP; while Loop is ready to return the spectrum of 21 licenses. 

And those are partially hit – Idea Cellular and Tata Tele filed a review petition on the ground that they applied a long before; Videocon is continuing its services as they are commercially available in few circles.

But the game is tricky for Uninor and MTS India who already invested a lot in the market and this judgement hit them worse than any operator. Foreign investers of MTS India – Sistema JSFC seeks their right via Bilateral Investment Treaty, which appears to be a strong case favoring Sistema.

In this situation Uninor is in critical condition. They planned to break even within 2013-2014 and this judgement hit them at a crucial time. Telenor, the majority foreign owner of Uninor has its investors agitated. Investors on Telenor do not like to invest more on this scam-striken Indian telecom market.

At this moment Telenor took a different approach, they flied Sigve Brekke, Head of Asian operations to India and started confidence building campaign as many employees are leaving the company. At the same time Uninor employees started campaigning for Uninor over social sites. They also published advertisements on leading dailies with ‘Continue to talk…’ tagline. Uninor is seemed to win the game by sympathy vote.While investors are reluctant to pour money in Indian operations does this strategy work for Telenor? Time will tell that!

But it is obvious basic needs of customers like proper customer care, network expansion are neglected. If you see MTS is on their roadmap and expanding its high speed wireless network over circles. With this campaigning Uninor is spending more to capture a single customer.

Telenor took some strategies (in India) which do not seem attractive in long run.

Uninor IndiaUninor has no postpaid option while new players like MTS India, Tata Docomo GSM are offering postpaid plans along with regular prepaid plans. Without postpaid many corporate users will turn down Uninor’s offering. Being prepaid means Uninor is still another connection to a person in this multi-SIM environment.

Uninor continues maintaining its low profile as poor man’s second connection despite of the fact like other new players they are also a part of the gang who brings competition to Indian 2G voice market. Uninor also does not offer Blackberry services or smartphones with bundled data.

It is sure that in mobile voice market is getting saturated, urban market is already saturated with multi sim environment and rural market is following the trend at fast pace. Data is considered to be the future.

In that sceanario Uninor is lazy to think about data strategy. Their official GPRS FAQ says “… maximum speed may reach to 40 kbps in 2.5 G network.” Users also complained that Uninor often caps GPRS speed at 40kbps (=dial up speed).

Telenor did not take part in 3G auction in 2010 which was quite justified considering 3G is yet to take off. But why didn’t they take the risk to provide competition in the next level of mobile communications?

To get back the spectrum lost, Telenor has to put huge money in upcoming 2G auction. Also they have to buy out some shares of JV to keep their stakes at 74%. With investors’ hesitation Telenor’s Indian venture is under financial crisis, and they will not participate in 4G 700 MHz spectrum auction for sure! Future is not so bright for Telenor’s Indian operations!

What do you think looking at the future can competitive Indian telecom market can make Uninor sustain in the long run do share your views or will it be another case of STEL and Cheers Mobile ?

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