Uninor achieves break-even in five of its six telecom circles

Continuing the winning streak with passion and commitment, the Bihar & Jharkhand team becomes the fifth circle in Uninor to break-even.

Written: Sep 2013

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Resulting from its lower costs per minute (up to 40% lower) and sabse sasta tariffs (up to 60% cheaper) Uninor has achieved its financial break-even in Bihar and Jharkhand circle. With this, five out of Uninor’s six operating circles have now achieved profitability. Uninor has also announced that it will continue to offer tariffs that are cheaper than those of its competitors in its operating circles – Sabse Sasta will continue.

Uninor has now achieved its EBITDA break-even in the circles of UP West, UP East, Bihar and Jharkhand, Andhra Pradesh and Gujarat. The Maharashtra and Goa circle too is well on its way to achieve this milestone within the committed timeframe of calendar 2013.

“Uninor is well on its way to meet a commitment of pan-India breakeven that was made 3 years ago when we started. In the process, we have been able to bust prevalent myths that efficiency needs scale and profitability needs high-end services with expensive tariffs,” said Yogesh Malik, CEO of Uninor

“We also prove the success of our model in diverse markets – equally in circles like Gujarat and AP with lower energy costs and higher ARPUs and UP and Bihar with higher costs and lower ARPUs.”

In Bihar, break-even with lowest ARPUs

At the time of break-even, Uninor serves 4.3 million subscribers with a network of 2,442 sites and 50,000 points of sale. It is important to note that in each of its circles, Uninor operates only in the pre-paid segment and serves the mass market with basic services.

“We are proud to dispel the myth that telecom investments in Bihar and Jharkhand circle are unattractive from a financial viewpoint. With our break-even, we prove that investing in a market with low ARPUs and needing affordable services the most can be a financially prudent decision,” said Abdul Jameel, Circle Business Head for Bihar and Jharkhand.

Next phase of network expansion underway

Uninor has also started its next phase of business expansion across its circles. In this phase, the company will expand its network and retail presence with a focus on the rural markets.

Uninor has also introduced new and unique innovations in its sales and distribution to take the company’s services into rural markets. In UP East, the company has launched a concept of micro-distributors – one person business serving as distributor, retail executive and activation officer combined.  45 such Micro-distributors are now taking Uninor’s SIMs and recharges to rural retailers and subscribers. In Gujarat, Uninor has launched a full program called “Gaam No Faydo, Uninor No Vaydo” (Benefit of Villages, Uninor’s promise) that entails the company’s largest ever expansion into rural Gujarat.  Across the six circles, Uninor has also launched Express Stores – low cost small format exclusive franchisee shops that take 7 days to set up. The company now has 879 such Express Stores in its circles.

“We view break-even as a milestone – a proof of concept of our strategy and model. As we achieve this in our circles, Uninor is also embarking on a major business expansion. Our ambition is to scale up and grow both deeper and wider in each of our six circles – increasingly into rural markets where affordability is key,” said Malik.