The Videocon Group headed by Venugopal Dhoot is set to enter the telecom market in India as a mobile operator, with investments of Rs.14000 crore over the next three years, in a bid to join the hyper-competitive telecom industry already marred by price wars from 12 other telecom service providers.
The Videocon Group, which is also a leading player in Consumer Electronic goods, launched its nation wide GSM mobile service on March 25, 2010. According to the Chairman Venugopal Dhoot, the company is targeting new users to begin with. At the same time the group would also like to shore-up substantial number of subscribers once Mobile Number Portability (MNP) comes into force.
After years of waiting, MNP is set to be introduced in India, which allows the subscribers to retain their existing telephone number when they switch from one service provider to another irrespective of mobile technology.
The MNP will play a very crucial role for the new entrants in telecom services providers, such as Videocon, Uninor and MTS, in grabbing hold of new customers from the mouth of old horses in the game, through competitive, superior quality and better technology-oriented service initiatives.
Videocon Group, which is the latest entrant in India’s telecom market, is marketing its service with a ‘sub-1 paise’ plan while attract new customers, in order to compete effectively with other new service providers like Tata Docomo and MTS among others who are aggressively marketing their products to woo the market of new customers.
Venugopal Dhoot, who seems confident of turning the telecom vertical of the group profitable within next couple of years on the back of volume play, said,
“We want to be the top 3 service provider in the country over the next three years and to fulfill this, our plan is to invest Rs.14, 000 crore in this business over the next three years,"
The Videocon Group has also applied for 3G licenses, barring Mumbai and Delhi market. The company plans to roll out services in 100 cities and towns over next 3 months to turn into a pan-India player of telecom operations.
The telecom market in India is largely dominated by older players like Bharti Airtel, Reliance communications and Idea among private players in mobile service business. In latest, Bharti Airtel is very close to sign a deal to acquire African operations of Kuwait’s Zain Telecom for $10.7 billion, in its bid to diversify from over-crowded Indian market.
With the entry of Videocon, Indian telecom market now constitutes of 13 players. Will it mar the prospects of further investments into the sector?