Norwegian group Telenor aims to generate positive cash flow from India by 2014 as the operating cost per mobile phone falls with rising subscriber numbers, its Asian head said on November 18.
Telenor, which trades as Uninor in India, currently spends more than the 0.36 rupee (0.8 US cent) that market leader Bharti Artel needs for one minute of customer talktime, Sigve Brekke, head of Telenor's Asian operations, told Reuters.
"It's a very competitive market, and you're selling to very cost conscious customers," he said in an interview. "What we really want to do is to drive our cost per minute downwards, which is key in the market."
Brekke also said Telenor will bid for a 3G data licence in India only when real mobile penetration rates rise to 60 percent from about 35 percent currently, a scenario he felt was still years away.
The company sat out of India's 3G network auction earlier this year, allowing rivals such as Bharti and Vodafone's India operations to win licences to run and operate the high-speed data network.
"I am most concerned about bringing our cost per minute down and gaining new customers," Brekke said. "What customers want right now in India is good quality voice calls and basic data services that do not require a 3G network yet."
The Telecom Regulatory Authority of India says the country had a mobile penetration rate of about 59 percent in August, but the subscriber base may not reflect the real number of users as some customers have multiple phone numbers.
Some mobile users in India can have up to five or six cellphone numbers to take advantage of cheaper calling costs which change depending on the time of the call and the operator, driving key indicators such as average revenue per user (ARPU) downwards, Brekke said.