In Part 1 of this two part interview series, we spoke with Atul Bindal, President, Mobile Services for Bharti Airtel, on data trends since the company launched 3G services, their approach to 3G in terms of on-deck versus off-deck, and 4G-LTE. In Part 2, we spoke with Bindal on bundling services, whether Airtel will look at exclusive content (say exclusive live streaming for a Cricket Tournament on 3G), OEM App Stores and telco billing.
MediaNama: The Ecosystem outside the walled garden is primarily English, what do you do for increasing data consumption among the regional markets?
Atul Bindal: Thats a great question. Today we have a lot of development effort which is going on. Not just inside the company but working with individual small developers and firms, all about developing vernacular content. Even on app store,if you see, what the world knows is 100,000 + apps, 1.3 million downloads.
What is the lesser known fact is that it is not the largest of the cities which are driving app store consumption; it is the likes of the hinterlands of Bihar and UP. They are not downloading English apps. They are downloading entertainment, Eductaion and productivity apps which are very bandwidth hogging and work well on Edge/GPRS. And, they have local language content. That needs to grow at a phenomenal pace. We have just started scratching the surface there. It’s almost like a tipping point: things are beginning to happen (i.e. 3G), and this would actually start promoting the creation of that language content which fuels this fire.
MediaNama: But the App Store is in English
Atul Bindal: Not all of it. There are local language apps there.
MediaNama: But the Interface is in English
Atul Bindal: Yes, so we are working with some of the handset manufacturers right now so that the operating interface of the app store can be in the local language. We have the ODP strategy, a developer platform. Think of it like an API which I can work with the device manufacturer, and then it can start sitting on the front screen only. And that can actually take you to a local language world. (ED: we’re written about the opportunity in touch screen handsets)
That’s work in progress right now, but we’re very mindful of the fact for 3G to really take off across the hinterlands of the country, that’s what it would take. To begin with, our first focus will be, and I’ll admit that we want to open the next 40 cities which should happen in this month itself, and we should be in the next 1000 cities by the same time next year. Given the kind of investment that we’ve made, this is a strategy for the next decade and beyond. I think we’re moving towards a world where all of these networks will co-exist – 2G, 3G and 4G, and therefore, the development and focus has to be in the local vernacular.
MediaNama: What kind of consumption are you seeing outside the main cities?
Atul Bindal: If you were to look at EDGE enablement, over 90% of our cell-sites today would have EDGE enablement. Cities like Delhi would have 100%, but even if you take a Karnataka or an Andhra or a UP, 88-90-92% are edge enabled. The consumption patterns are significant even in smaller towns. They’re not clogged, but there are many small towns where we have to provide dynamic time slots, because otherwise the experience on 3G starts getting compromised.
I must point out that the key enabler there has to be the smart phone penetration. Today, the percentage of 3G devices for the industry as a whole is about 7-8%. That number is going to be breached very soon. Unless and until the first salvo comes in terms of a low price point HSPA+ 3G handset, which can start driving adoption. The key is that there are a very large number of customers still coming in, and that’s where the handset upgrade opportunity is.
MediaNama: Would you consider bunding?
Atul Bindal: Yes, absolutely.
MediaNama: And how do you lock-in a consumer in India?
Atul Bindal: We would try and encourage those kind of mechanisms by which the customer would stay and stay with us, such as continuing to reward him in perpetuity rather than just one time. But could we see contracts or end of term contracts? The answer is no. If you’re asking me ‘will Airtel will consider handset subsidy?’ At this point in time, I don’t think we will go down that route at all. the good thing is that in a country like India, handset manufactuers have invested money and energy in building their own sales and distribution networks. Abroad, where handset subsidies are there, they don’t have their own infrastructure. Therefore, the best play possible is for the two ecosystems to come together and for there to be a synergistic play. Right now, it is a category growth time. We’re talking about broadband penetration at well under 1%. The cake size is going to grow.
MediaNama: How do you view operator billing for external app stores. For example, Nokia’s recent deal with RCOM. India’s one of their last markets, where they have managed to get a toe in the door.
Atul Bindal: It’s a very tricky subject. At the end of the day, we will be customer led. I like to have those kind of strategies and programs which allow us to address the needs of individual developers and small developers directly, rather then go through an aggregator layer. Having said that, Nokia is a valued partner, and a long term strategic partner. We will make sure that their arrangements with us are such that they are future value building, both for customers as well for both partners, with some kind of sharing on the lines of revenues, costs, or payouts.
MediaNama: Both in case of Nokia and Android – what is holding back the Indian operators from doing deals with them? Is it the revenue share?
Atul Bindal: I don’t think there is anything coming in the way at all. We’re a very strong believer in partnerships. This company wouldn’t be there if it was not for partners. I again want to bring the discussion back to app stores and App Central. I fundamentally believe, and I would like to argue, that an application portal is much better sitting in an operator ecosystem as compared to a device ecosystem. Why do I say that? Because I’m the only one who has real time information on how she (the consumer) is consuming right now – what she is consuming, when she is consuming, and therefore, I can keep in sharing that in an aggregate way with potential developers, so that they don’t necessarily develop the kind of applications and solutions which may not take them anywhere. In the case of a device, you’re actually forcing consumption.
MediaNama: Are you using the personalization data as of now? Right now, apps are essentially shelf life driven. If it’s there’s on the front page, it gets downloaded. Do we see personalization come in, where different personalized apps will be surfaced to different users?
Atul Bindal: A part of that is a real estate issue, where we need to promote spaces where we would like to build focus. Part of that is customer driven. But again the key is that even what sits closer to a single click or double click away has to be driven by what the customer feedback is coming in, rather than someone just continuing to sit there because either there is a contract which is binding us to do that. But increasingly, the customer will have greater and greater choice, and we need to embrace that.
MediaNama: Would you look to directly buy rights to sports events to drive consumption?
Atul Bindal: Sure. Directly or indirectly, exclusive, preferred, non-exclusive or shared. The best part of this industry is that it has competitiveness which borders on industry rivalry, and it also has collaborativeness of a very high order. So lets not try and create exclusivity for the sake of exclusivity. If we feel that by creating a shared ecosystem, the cost of delivery can be brought down to such an extent that the benefit of that can be passed on to the customer, which will then drive affordability and build volumes, then I would argue that that is a superior strategy, because we’re starting at a very low base, and there will be enough time to compete.
Also read: Part 1: On 3G Rollout, Data Trends, 4G, VAS Cannibalization