21 November 2017 09:47:30 IST

‘Winding up mobility business was a good decision’

Videocon Telecom CEO says the game was only for incumbents and big players

Immediately after shutting down its telecom mobility business in May 2016, Videocon Telecom made a comeback by venturing into six new verticals. In a tête-à-tête with BusinessLine , Videocon Telecom Chief Executive Officer Arvind Bali says telecom was a loss-making business and shutting it down was a good decision. The company, which now offers video surveillance under Videocon WallCam, expects the brand to be one of the top three players in India by 2021. Excerpts:

Videocon Telecom was among the first to wind up GSM (Global System for Mobile Communication) operations, and you have maintained it was a wise decision?

Yes, it was a good decision as we realised that this game was only for incumbents and the big players. We were losing heavily in our mobility business and saw no window for recovery, and ultimately there was no future. So I guess it was a good decision to wind up.

You also shelved your earlier Mobile Virtual Network Operator (MVNO) plans...

MVNO works in countries where call rates are very high. Operators generally go through an MVNO when they want to improve their market share of network consumption. In principle, minutes are bought in bulk at a cheaper rate, which is then sold by others at a discounted price.

Technically, there is no business case for MVNOs in India any more as now practically all mobile network operators are offering unlimited voice and data at rock-bottom prices, making the business case for MVNOs a non-starter.

What was the thought process behind getting into new ventures?

The thought process was simple: business continuation and manpower engagement. Once we decided to shut down our mobility business, we formed a cross-functional team and started scouting for new businesses, which were telecom-related, but not spectrum-dependent. At the same time, these businesses should not need large capex, should be a growth segment, should synergise with our existing businesses and should utilise our existing manpower.

Now you have a strong presence in broadband. What are the other verticals?

We started offering broadband through technologies — all developed in-house — such as Fibre to the Home (FTTH), Wireless Broadband (WBB), vector technology on copper and also through cable (Ethernet over Coax - EOC). We also formed another vertical, Videocon Edge, to offer services including SMS solutions, toll-free and missed-call solutions, OBD (Out Bound Dialer) and IVRS (Interactive Voice Response System), short- and long-code solutions, and others such as location-based and proximity marketing solutions and chatbots.

Another vertical specialises in end-to-end security and surveillance solutions, smart cities and smart homes solutions, and undertakes projects for large corporates and the government sector.

We are also successfully running our wholesale carrier business vertical for international long distance and telecom tower business. We have also recently added eKYC verification vertical to our portfolio, where we provide Aadhaar verification as a service model. Then there is our newest venture on video surveillance, Videocon WallCam.

What will happen to Videocon Telecom as a brand?

Videocon Telecom is a well-established brand and we intend to continue to use it. We are doing our eKYC business, telecom towers business and wholesales carrier under this brand.

How is your smart solutions vertical Videocon Edge faring? What are the ambitions for Videocon WallCam?

We expect Videocon Edge to do about ₹180 crore this financial year and grab a fair market share. Our aspiration is to deliver a top-line of ₹500 crore in FY202.

On Videocon WallCam, the market response has been tremendous within three months of the brand’s rollout. We are scaling up our production and adding newer models and solutions to address the market demand. We expect this to be among the top three players in India by 2021.

(The article first appeared in The Hindu BusinessLine.)