Friday, April 16, 2010

Despite being a late entrant in the cluttered telecom market, MTS today boasts of over 2 million subscribers.

And that too within just a year of its launch. Apart from some really innovative marketing solutions, what else is this JV between Sistema of Russia and India’s Shyam Group doing? Surbhi Chawla finds out...

October 9, 2009, was little different for the daily commuters on Delhi-Noida DND Flyway and Delhi-Gurgaon Expressway. A surprise to many, both expressways had gone toll free for almost five hours between 9-11 am and 5-8 pm. And interestingly, it wasn’t the Toll Authorities that favoured this free and unhindered access to all vehicles on both the gates, but a lesser known brand MTS that wanted to communicate the launch of its services in Delhi and NCR along with the roll out of its high speed data services (MBlaze) across the country.

You must be wondering (we too are!) what lead Sistema Shyam TeleServices (that offers services under the brand MTS) to decide on this innovative and big budget (at a time when other players in the sector are adopting cost-cutting measures) tactic to communicate its launch in this circle? “We believe in speed and unhindered access. This is in fact the key to our voice and data services. Through this initiative we wanted people in Delhi and NCR to experience our philosophy that we promise them through out network,” explains Vsevolod Rozanov, President & CEO, Sistema Shyam Teleservices Ltd (SSTL).

For starters, MTS is a global telecom brand that kicked off its operations in India in 2008 through a joint venture between Sistema group of Russia and India’s Shyam Group. While Shyam Group holds 23.5% stake in the venture, the majority 74% stake is with the Russian firm. The rest 2.5% however remains with the public.

MTS started with Rajasthan circle under the brand name of Rainbow, which was changed to MTS earlier this year. Though, the company has licenses to offer wireless telecom services in all the 22 circles of the country, but as of now they operate in only eight (including Delhi that was launched in October) of them. However, it plans to kick off operations in another five circles by the end of this year. In fact, after Delhi, company’s next targets happen to be the Mumbai and Karnataka circles. And if one gives a closer look to its overall gameplan, then MTS is eying operations in all the 22 circles of the country by the second half of 2010.

But, given that the Indian telecom market is already cluttered (with more than 10 telecom operators pushing for their connections in every circle) it’s quite clear that a new player like MTS is definitely not going to have a smooth ride to success. While the task on one hand would be to sway subscribers from established operators, on the other it will have to reach out to the consumers in B and C circles that have not yet woken up to the benefits of wireless telephony.

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Source : IIPM Editorial, 2010.

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

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