“Telecom would be the last one to get affected”

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While the slowdown has forced many to take a backseat, Sandip Das, CEO, Maxis has gone a step forward by announcing huge expansion plans. So, what’s in his mind?

4Ps B&M: What is India’s contribution to Maxis’s total revenues?

SD: India currently constitutes about 18% of the total revenues for the entire group. Moreover, there are currently 17 million subscribers in India out of the total 30 million subscribers that we have. But as we have a large stream of data services in Malaysia, therefore the ARPUs there are better. In fact, about 29% revenues of the Malaysian operations come from non-voice services.

4Ps B&M: 3G bidding might take place anytime soon. So, what plans have you drawn in this regard?

SD: As a company we are very serious with regards to the 3G bidding in India. Moreover, we have a very good track record in terms of 3G, as we are already providing these services in countries like Malaysia, Indonesia and Sri Lanka. Thus, we are very excited about the opportunities that lie in the 3G sphere in India. In fact, there are a host of services that we can provide with the help of 3G spectrum and these services are actually needed in the Indian hinterlands. I would like to give you an example which may sound very exciting. Our Sri Lankan operations Mobitel, has just launched a distant learning course, which awards an MBA degree, certified by the University of Colombo – all on the phone using the 3G network. This is something that brings alive everything that we have till now only dreamt of. Besides, there are many other opportunities, like in the sphere of medical health that we wish to provide to our Indian customers.

4Ps B&M: Till now, nothing much seems to have happened on the handset bundling front. Are there any plans to rekindle that area?

SD: I think handset bundling is related to 3G itself and yes there is definitely an opportunity lying untapped. Traditionally, the reason that it has not taken off in India is that the recoveries here are very poor and as such the operators find it very hard to subsidise the handset. But now, as we see a host of handsets coming into the market, there is certainly a need to put a data recipient device in the hands of the consumer. I think people can look at getting into strong one to two years contract. Even the operators would be willing to provide bundles. Moreover, I think that opening up of the 3G licence in India and China will also change the 3G model across the globe. The prices of handsets with 3G would collapse and bundling would become popular.

4Ps B&M: Has there been any impact of the slowdown on the telecom business?

SD: Well, a lot was being said that the enterprise segment will have to cut down on cost, particularly the variable costs like travelling expenses, advertising, et al. Although people have started travelling less, they have actually started talking more on the phone, which is good. But, at the same time it has also impacted revenues that used to come from roaming. However, one thing is sure, telecom industry would be the last to get affected by the ongoing economic slowdown.

4Ps B&M: Are you taking any steps to further safeguard yourself from the ongoing crisis?

SD: Yes absolutely. In fact, we are watching our costs. Costs are your only insurance at this time given the fact that revenues are going down. Further, more than anything else we see the client businesses also going down and if they watch their costs and look at cutting expenses, then in a way our business is bound to get affected. But, I also think that this is a great time for organisations to detox themselves because it asks you to go back to the basic every time. You have to make your money last longer, don’t make unnecessary hiring and more importantly, do things that are closer to the consumer than ever before. The more you will look inwardly and less towards the customer, the chances are more that you might get punished in this market.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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