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Live: Uninor Launches In 7 Circles; Price War @Rs. 0.29

Today, Uninor flipped the switch on its network to launch in 7 circles simultaneously – Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, UP East, UP West, Bihar and Jharkhand. It covers a national footprint of 600 million people. The GSM service, which has spectrum for launching in 21 of 22 circles, expects its next phase of circles for Uninor to go live early in 2010. As we had reported earlier, Uninor is taking the hub and spoke model for its launch. The company is targeting 8% marketshare by 2018, and EBITDA break-even in 3 years, and operating cashflow break-even in 5 years.

Telenor CEO & President Jon Fredrik Baksaas said, “This is the fastest rollout we have ever done, because the business model has become standardized. We are here to stay for a long time, and there is no reason why India should lag in mobile density in Asia, and we hope to contribute. In Telenor, we know that increased telecom density spurs economic development.”

Uninor doesn’t intend to bid for either the 3G or broadband wireless access spectrum, expected to be auctioned in January 2010.

The Brand: Ab Mera Number Hain

The tagline for Uninor’s service in India is “Ab Mera Number Hain”, literally, that “it is my number/time”. While it intends to be aspirational, we think, tongue-in-cheek, that it refers to the large number of new telecom operators that have launched in India: that it is now Uninors turn.

Of course, Uninor brand believes that its tagline reflects individuality and youthfulness. Uninor has 210,000 points of sale on launch date in the seven circles, with 1000 exclusive distributors, both franchise and fully owned. They are going to track SIM sales to the shop. They’ve partnered with Genpact, Sparsh and Aegis for customer service.

Price Plans: Talkmore @29p and Callmore@29p

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So the price war has hit a new low with Uninor dropping call prices to Rs. 0.29 per minute. Speaking at the press conference, Stein-Erik Vellan , MD of Unitech Wireless, emphasized that the company will not offer per second billing. Uninor’s plans:

Talkmore@29p: the plan offers customers local calls at Rs. 0.29 per minute and STD calls at Rs. 0.49 per minute, with a call setup fee of Rs. 0.39.

Callmore@29p: the plan offers local calls at Rs. 0.29 per minute and STD calls at Rs. 0.49 per minute, with a daily rental of Rs. 2.

Vellan said that the company is targeting medium to high ARPU customers.

Our Take

Uninor may have officially launched its services, but we get the feeling it hasn’t shown all its cards yet: there is little new on offer in terms of pricing, and frankly, there is little room for lowering prices further in the Indian market. Vellan didn’t go into specifics of services, so the company will find it difficult to establish a differentiator in the market. Targeting an 8% marketshare by 2018 means that Uninor isn’t going to be aggressive with its service in India: hence to bid for 3G or BWA. It’s as if the company foresees rationalization and consolidation in the Indian market over the next year or so, and doesn’t want to risk too much until things settle down.

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