You announced the boldest infocom initiative in the country in terms of its scope, scale, and spread. At the end of two years, when your rollout would be complete, what distinct and converged market segments do you see Reliance Infocomm staking claim to?
Our endgame is to reach the individual, the office, and the home. What we are talking about is connecting all the 640,000 villages and all 2000 odd towns and cities in the country to each other and to the world- spanning the domains of voice, data, video, and value-added services. The US has only about 100 out of 700 cities with the 1X technology that provides the benefit of mobile voice, data and video. In India, we are targeting 100 % of the country. Ours is a complex architecture of domains, functions, facilities, coverage, and services.

And market segments?
You see, one cannot directly compare Reliance Infocomm with any of the existing players. Our service levels and approach would widely differ. We would be present in mobile telephony, wireline telephony- NLD, ILD, Internet services, video services, data centers, managed network services, video-conferencing, specialized enterprise-related applications and the like. Presently, it is difficult to categorize or even list out the full scope to which our infrastructure, technology, and applications can be put to use. It is continuously evolving.

Your launch largely focused on consumer offerings. What’s in it for the enterprises? Could you please detail your service offerings for the enterprises?
We chose to start with the consumer mobile revolution through Reliance IndiaMobile service that will reach out to 90 % of India’s population and eventually every Indian. After this, by mid-2003- we will start off with our enterprise revolution in which we will provide 100 mbps Ethernet links to every desktop and device in half a million enterprise buildings initially and eventually 10 million commercial buildings. This will empower every enterprise by making transactions efficient, functions seamless and new economic opportunities abundant. We will talk more about this later in the year when we roll out our enterprise services

And the convergence space?
In end-2003, the consumer convergence revolution would be kicked off by providing high speed Ethernet links to homes initially in 4 cities and eventually every 80 million homes all over India. This will enlighten every home with an entire range of television channels, high-speed telephony, Internet, audio-conferencing, video-conferencing and video-on-demand.

When do you plan to launch your NLD and ILD services?
The network is ready. The mobile services will start commercially in March. Between now and February we will be having around 200,000 launch partners who will test the network and provide valuable service feedback. Bookings start from January 15 onwards and the Dhirubhai Ambani Pioneer Offer closes on March 31, 2003. The NLD and ILD services should also start simultaneously.

What about your interconnect agreements with other operators, especially since they could be cagey about it?
You see, globally, there has been no case of any operator who has been denied interconnectivity. It defeats the sole purpose of reaching communication to one and all. So, we expect to work it out with all the operators. And we expect cooperation from all. Basically, interconnect agreements cannot be denied.

Aggressive pricing is good for entry. But do you see a point when you would look at increasing the rates? How do you see these things shaping up in the mid to long term?
Rather I would call it appropriate pricing- pricing at a point where the market sees value in going in for the service. We are driven by late Shri. Dhirubhai Ambani’s vision of making communications affordable. There have been enough examples of companies, not only in communications but even in FMCG, who have come in with the sole purpose of skimming the surface. And inevitably they have got wiped out. Does that mean that we are forever going to pursue the lowest price strategy? No. We have our own capital productivity norms. In a country like India, it is important to look at cost-volume trade-offs.

What was the reasoning behind the decision to go in for CDMA, considering that CDMA has not met expectations in some of the places? How will this work out?
We have gone in for CDMA 2000 1X technology and tested it enough before deciding on it. As a company, we have a record of sorts in trying out new technologies and being phenomenally successful at them. In the oil & gas industry, when everyone said it is unviable, we went ahead with deep-water drilling. And the results are obvious. We believe technology is only one part of the user’s experience. Two cooks may turn out vastly different dishes from the same set of 10 ingredients. It is the interplay between technology, systems, network, processes and the like. We don’t know what was missing in the other cases. So don’t blame it on CDMA. Korea and US have been able to exploit it well. And as for 3G on GSM, Europe is reportedly facing lot of problems. It is our mix that is going to deliver the customer experience. CDMA 2000 1X is more data-capable. It opens entirely new possibilities – like developing applications on the J2ME platform, all of which can have a multiplier effect.

How do you plan to balance GSM on one hand through cellular license and CDMA on the other hand? Do you plan to merge the two into Reliance Infocomm?
No. They are run and managed as a separate company and we don’t plan to integrate them. Incidentally, we are making money and are profitable in our GSM businesses.

Free SMS and Internet access not allowed by rules….
Not so. If you read the provisions of the basic services license, it is not so. The license is given by Govt. of India, Dept of Telecommunications and we are clear about it.

What is the basis of your business strategy? How does it translate into returns?
We don’t see infocom as being different from any other business. For us, affordability is the key issue because only with affordability do you really sell and expand the market. So far all the voice and data services were privy of the privileged few. We believe that only a certain percentage of the overall income does one spend on communications and it comes in a hierarchy of needs. We have our own proprietary thinking in terms of what that money is. We then work backwards from there and look at the volumes that are possible. My father used to say- “ Rather than making Rs. 100 a kilo on polyester yarn and sell 100 tones of yarn, it is better to make Re. 1 a kilo and sell 10 lakh tonnes, you still make more money and spread more prosperity. Given the affordability and if you work backwards, this business also has capital expenditure, also has operating expenses- and then you factor in your returns. At Reliance, we never work for anything less than 20% and 35 % returns…. All the risk assessments and weightages that we do, we target 35 % and in the worst case 20 % returns. It is exactly the same for infocom too. We are not treating this as a new economy kind of a business. Every business has to make money.

Reliance has a reputation for ‘capital productivity’. How does it work in this business?
In my view, it is to be viewed as a holistic process. of course, at the end of the day, the simplest way to think about it is – what is your overall cost per sub, per cable km, per BTS Tower - these ore the overall components. Because we work backwards from the customer, we are forced to target a capital productivity number. The customer can pay only so much, these are our operating costs, we need so much returns- so we have to build this at such and such cost. Only then, we start worrying about the where the market is, what can we do to build it, what’s the architecture, what are the components, what are the specs, what kind of value engineering do we need , etc. That’s how the whole process works. Very rigorous and perfected through our entire process industry experience of investing over Rs. 70,000 crore. Again not rocket science, but very simple. Within the infocomm business, as we are dealing with IP, it is possible to trade volumes because most of the partners are looking at the total amount of money they can get from this project.

Having invested so much and come thus far, is there any Plan “B”, if you meet a hurdle- regulatory or otherwise?
We are in this business for the long term. We are looking at a 20-year timeframe where we can add value. We continuously believe in learning everyday and updating our plans. We have an infinite number of plans A, B, C,.. and so on. We have invested for the long-term, not to sell out to somebody or make a quick buck. We think India is very unique. It is a one-time opportunity in the lifetime of a country. We had deregulation and open entry policy combined with some stabilization of technology and a huge market waiting to be explored. It gives you a historic opportunity. We are just lucky to be at the right time and right place to have got this opportunity.