CIOIN

Interview Questions

Full Interview with Vsevolod Rozanov

Vsevolod Rozanov:

The problems of the Indian telecom industry are constantly being juggled by the media to suit various stakeholders. Our greatest challenge is sourcing the right talent. (Editor's note: This interview was done before the 2G verdict).Unlike what most people think, telecom is a high-tech industry and needs specialized skills sets. There is a huge talent crunch in telecom. We have 15 operators today and the talent pool has stretched thin. Attrition is high because of the multitude of opportunities for employees. To develop the right set of skills for telecom, we need to grow and nurture people gradually. But that’s not happening today.  This is the major problem area.

Vsevolod Rozanov:

 Not at all. Every month, we reach a new high in the number of new subscriptions that have signed on with us. There still exists a huge opportunity in the Indian market. Given India's overall growth in terms of GDP and the pace of growth, there is still great potential in the number of new subscribers in less developed areas.

Vsevolod Rozanov:

 Our biggest grievance is the lack of spectrum allotted to us and the lack of clarity around the subject. We have the least amount of spectrum amongst all operators. And currently, we are way above the subscriptions-to-spectrum ratio and yet there is no transparency in getting the spectrum we rightfully deserve. The lack of spectrum is affecting the quality of service we offer our customers. It is unfortunate that we need to spend our capital just to keep up our services in places like Mumbai, instead of spending it on mobile broadband or data services. This is indeed very sad, and we demand that we be allotted the spectrum we’re entitled to. We’re making our case to the DOT.

Vsevolod Rozanov:

 We need to constantly amaze and amuse customers and you can only do that by understanding customers and innovating to serve their unstated needs. Here’s where IT becomes a game-changer.
At MTS, the key focus of IT is to work together with marketing. Understanding the customer, having in-depth analysis of their behavior and future needs, are our main focus areas. Based on these insights, our product development team can offer better services. 
Take the MBonus initiative for example. It’s an IT-marketing project. MBonus is like a frequent flyer program that offers attractive discounts to customers encouraging them to talk more. Initially, we went with an external vendor to deliver this. But Rajeev (Rajeev Batra, CIO, MTS India) fought for it and brought it in-house. IT did all the development and delivered a much better result than we would’ve expected from an external partner.

Vsevolod Rozanov:

They recently came to me with a concept for the personification of dongles. Dongles are very different from cell phones. People love their phones but are quite dispassionate about their dongles. The team suggested that if we could create something that went beyond speed, that could provide a cultural and intellectual experience to the customer, they would be more attached to their dongles. I loved the idea. We are now working on some shapes and forms, which haven’t yet reached the market so I cannot divulge more details.
As a new operator seeking its way to profitability, we operate with a higher-risk-higher-return approach. If we go the conventional way, we won’t get past
our competitors.  

Vsevolod Rozanov:

 We never expected a hockey stick-like growth. At this stage that would be irrational. The market is very niche at 5-6 million customers.  The data population is significantly lower than PC penetration and even less than voice penetration. That said, our data business is thriving. Today, 35 percent of our revenue comes from non-voice sources. While we don’t expect any groundbreaking changes in the near future, we’re performing very close to our potential.

Vsevolod Rozanov:

 There are no disadvantages to being a CDMA player and, in fact, it has served us very well. The only perceivable downside is the limited range of CDMA-enabled devices. We are working a lot with vendors and this state of affairs has improved significantly. We recently launched, for example, a whole new range of CDMA-enabled phones in partnership with Samsung, Google Android and HTC, among others.

Vsevolod Rozanov:

 Looking back, there isn’t much I would’ve done differently, except perhaps entering the market with a voice-only strategy. We changed that two quarters after we launched.  The potential of the data business is still very limited and voice still dominates 90 percent of the market.

Vsevolod Rozanov:

 I don’t see much difference between Indian and other Asian consumers. But there is a marked difference between the Indian and European customer. Indian customers are very focused on tariff plans and always make sure they’re getting the best deal. We have to strive significantly more to offer that extra benefit for them to use our services. The Indian market is driven by value. The Europeans are less value-driven and like to stick with brands.
Yes, the Indian customer is fickle, but so are all developing economies across Asia. The churn you see in the Indian market is the same as what you would witness in Indonesia, Bangladesh, Russia, and countries in Africa. Another characteristic of developing markets is that they are still mostly growing through pre-paid. Take for example how 95 percent of our customers are pre-paid customers. It will take at least 10 to 15 years for the market to move towards post-paid, in my opinion.

Vsevolod Rozanov:

 Our plan is not to outlast but to win. Many people think if they last longer than their neighbor they are a success. Not us.  There will certainly be more than two players in India and I assure you of that. What would be interesting to see, in the next few years, is how the competition will thicken in terms of how companies are able to grow and scale to serve this burgeoning market. That’s where we intend to outpace the others. We’re not worried about outlasting.