Hutchison India, another leading Indian wireless operator is targeting metros and adjoining areas. Canning Fok, Hutchison Group managing director, calls his India business “the new jewel in the group.” In 1995, Hutchison, sensing a huge business opportunity in India, started off as a minority partner in Mumbai cellular venture Hutchison Max. But when Max opted out, it acquired the latter’s stake.
Not to be outdone by upstarts Hutchinson and Bharti, brand-name firms Birla Tata and AT&T, entered the market in a joint venture. Sanjeev Aga, president and CEO, says, “The offspring of three illustrious parents (A.V Birla Group, TaTa cellular and AT&T Wirless), Idea Cellular will be driven by the objective of creating a difference in the lives of our customers.” Idea Cellular provides cellular services in Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh and Chattisgarh. Aga claims that his company has a 135 percent annual growth rate. Remaining to round out the market are government-owned BSNL and MTNL.
New Rules
But what actually allowed telecom firms to swarm after the cellular market? T. H. Chowdhary, ex-chairman of VSNL, explains, “although the telecom sector was liberalized way back in 1994 offering better services at cheaper prices to the masses, it was no where near to its goal, until the National Telecom Policy came into force in 1999. That has allowed a fourth round of bidding for the third and fourth licenses in basic and cellular telephony.”
There is some debate in terms of allowing fixed-line operators to compete in the mobile market. Major fixed-line players are state-owned and heavily subsidized monopolies MTNL and BSNL. Since they get free spectrum allocation and lower entry fees, they can afford to offer mobile services at cutthroat rates.
Swimming With Sharks
Bharti made a bold move on December 17 2001, going for massive cuts in national long-distance telephony services for cellular-to-cellular callers at Rs. 12 a minute, BSNL and MTNL were offering the same services at Rs. 24 a minute.
“That’s what the private cellular operators ought to do if they want to stay in the business. Telecom firms have to take bold steps and appease customers with innovative offers every time,” says Asim Ghosh, CEO of Hutchison Max.
In this spirit, Hutchison has tied up with Sabeer Bhatia’s TeliVoice, a global voice messaging service, to launch an exciting new service, which will allow its subscribers to send voice messages to the U.S and Canada at highly attractive rates. Ghosh calls it the first voice messaging service within and outside India.
State-owned telecom companies like MTNL and BSNL are in for major competition from the major private players.
