Towering profits in mobile services

Unitech Wireless, a joint venture company of India’s second largest diversified real estate major Unitech Ltd and Norway-based world’s sixth largest mobile services provider, Telenor Group, are looking for franchise partners to launch their services in India. On this occasion, TFW catches up with David Meneghello to share the company’s expansion plans.

What are the products offerings from Uninor?

As part of our retail strategy, we want our stores to be one-stop solution for all mobile needs. These shops would not only offer operator services like new connections, recharge coupons and VAS but also exclusive handsets, handset bundle offers and accessories. In addition, these shops would provide all customer service solutions and highly trained customer service representatives.

What made you enter the franchise segment for the expansion of Uninor?

Much more than the investment a franchisee brings in, it is the local knowledge and understanding of the market that is the biggest advantage of this model. The franchising route also helps us scale up quickly. We intend to be a pan-India operator with compelling and innovative product and service offerings that will create market excitement.

What are your requirements from franchisees?

We require a small store on the ground floor in a high footfall neighbourhood market. The franchisee should have a capability to invest about Rs 8 lakh.

But the need is also more than the investment or real estate. We will be a brand that is ‘different’ than others in this market. We will be a lot closer to the customer – both in terms of customer service and extremely targeted and customised service offering. So, we are also looking for a good cultural fit as well – a franchisee who thinks like us and works like us.

What kind of training and support a franchisee will get while partnering with you?

Our franchisee will not only be trained in store systems and processes but also in soft skills. Our franchisee model is a revenue and acquisition-centric model with emphasis on brand values and customer experience. The model has multiple revenue streams for a potential franchisee to grow business with us.

The other big advantage comes from our decentralised approach to business. A lot of decision making will happen locally. Our franchisees will be empowered to guide us on what works best locally because they truly understand the needs of the market.

How many outlets do you plan to open?

Starting from launch onwards, we progressively plan to have around 300 franchisee stores in our pan India operations. We would stabilise with around 2,000 plus franchisee stores in a couple of years time.

How big the telecom industry is in India and what is its present growth rate?

According to the TRAI report, India already has over 471 million wireless subscribers. What’s impressive is the rate at which this customer base is growing. Just within one month of September, almost 15 million new subscribers were added in India. This is a phenomenal growth and clearly signals a continuing and increasing demand for telecom services in the country. In fact, the government’s target for 500 million telephone connections that was set for the end of 2010 has already been achieved in September 2009 !!

With competition already at its peak, what are your strategies to succeed?

This is an intensely competitive market but also one with equally intense growth. With 12-13 million net adds a month, India continues to be among the most attractive worldwide. This, with a 6-7 per cent GDP growth means the potential is not just net adds, but also revenues.

The phenomenon of double and triple SIMs is perhaps much larger than anticipated. This means penetration, at least in urban markets to start with, can go well beyond 100 per cent. In rural markets, both scope for first connection and evolution on products and services is a big opportunity.

We also look at the 40 per cent churn, which is more usual in highly penetrated markets. In India, this means a large number of subscribers are changing their operator. With MNP expected to come in, this too will be an opportunity.

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