Uninor, the Indian subsidiary of Telenor, today shared its new Internet strategy by offering Facebook and Whatsapp at cost effective rates to a part of its 33 million mobile users. The telecoms said it will take a hit on messaging revenue by offering Whatsapp, but will improve Internet revenues.
Mobile Internet is future
Its ambitions reflect growth targets. Uninor, which achieved operational break-even last December, wants to double Internet revenue and Internet users in 2014. At present, 24 percent of its mobile user base accesses Internet on phone. The Internet user number of Uninor is growing rapidly due to flood of cost effective smartphones. This is despite 3G networks. Its targeted users will come from 2G users, who need to be happy with 100 Kbps speed.
Gujarat, Maharashtra and Goa will see Uninor’s Sabse Sasta Facebook and Sabse Sasta Whatsapp that will be available for 50 paisa for an hour of Facebook and Re 1 for a day of Whatsapp. Both are not sustainable offers, telecom industry analysts warned. In addition, Whatsapp messaging services will eat into the revenue of Uninor in India.
In Gujarat, Uninor’s Internet revenue has grown by 88 percent in 2013. In Maharashtra, every fourth Uninor subscriber is an active Internet user. Over the next few months, these special offerings will be available across each of Uninor’s operational circles.
Marry OTT and grow
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Uninor’s Facebook offering is part of a global demand of the social media giant that wants more billions to access Internet cost effectively on the smartphone. This demand did not get support from several telecom operators globally. But Uninor wants to partner with OTT players.
“It’s (OTT) a funny situation. We want customers to utilize both social media and messaging services. But our Internet revenue will grow. There will be a hit on our messaging revenue if our mobile users use Whatsapp messaging services,” said Morten Karlsen Sorby, nominated CEO of Uninor.
Uninor, which does not figure in top 5 wireless broadband operators in India, cannot ignore social media and messaging services. 50 percent of India’s mobile Internet users are active on Facebook and Whatsapp.
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Sabse Sasta (most affordable) Facebook and Sabse Sasta (most affordable) Whatsapp products will allow subscribers unlimited access to these services at one fixed charge for a period ranging from 1 hour to 1 month. With a one-time charge, subscribers can use Facebook and Whatsapp for the duration of the period without worrying about MBs and GBs.
The telecom operator clarified that it will not receive any funds from Facebook to offer budget Internet packages.
“These plans are a great way to discover Facebook and stay connected with friends and family without worrying about data charges on Uninor.” said Kevin D’souza, head of Growth and Mobile Partnerships, Facebook India.
“Selling Internet as rupees per MB is like selling air or train tickets as rupees per kilometre. What customers do with Internet is to use it for services like Facebook or Whatsapp. Our plan is to make these services the cheapest on Uninor,” said Sorby. “For us, internet will be about affordability and relevance.”
“For us to deliver hourly, daily, weekly and monthly offerings for unlimited Facebook at a single fixed charge, Uninor has had to map as many as 10 distinct entry points through which a subscriber enters Facebook. Each has been mapped and integrated into the system such that the subscribers get these cheapest tariffs, no matter how they enter Facebook,” said Amaresh Kumar, chief product officer of Uninor.
Uninor network
Uninor has also started a major upgradation of technology and infrastructure to get the network ready for the expected surge in Internet traffic.
The capacity expansion project includes enhancement of packet core nodes, creation of dedicated resources only for these services and enhancing transmission and compression mechanisms. With these, and other measures, Uninor network infrastructure will be able to support two times the Internet demand than what it is today.
Uninor is about to conclude an internal project to make the sales, distribution and customer service functions ready for the expected increase in Internet usage by subscribers. Uninor will set up stand-alone Internet service kiosks in each of its exclusive retail outlets, recruit additional resources at its customer service facilities and conduct internet specific training for all service agents.
OTT concerns
Telenor CEO Jon Fredrik Baksaas, who delivered keynote at Mobile World Congress 2014, wants the industry to reach out to the billions who are yet to be connected, and to use the SIM as the digital authentication for 2 billion consumers.
During the Mobile World Congress 2014, Jan Koum, CEO of WhatsApp, announced that the social messaging service will soon support VoIP calling. This will be a big hit on telecoms. These two announcements do not match.
“This news met with a mixed reaction. The Tele2 CEO, Mats Granryd, was unconcerned, given that his company already offers unlimited voice in all its markets, whereas the Millicom CEO, Hans-Holger Albrecht, worried about the 70 percent of his company’s revenues that still come from voice. Considering that Jon Fredrik Baksaas wants the industry to invest $1.7 trillion in new high speed networks by 2020, any loss of revenue is a concern,” said Emeka Obiodu, principal analyst at Ovum.
Baburajan K
editor@telecomlead.com
