Financial Daily from THE HINDU group of publications
Wednesday, May 01, 2002
Info-Tech - Telecommunications
Batata is now Idea Cellular
Mr Ratan Tata, Chairman, Tata group (right), with Mr Sanjeev Aga, President & CEO, Idea Cellular, unveiling Birla-AT&T - Tata's new corporate identity `Idea Cellular' in Mumbai on Tuesday. Report on Page 3
MUMBAI, April 30
CELLULAR services giant Birla-AT&T and Tata (Batata) has christened itself Idea Cellular Ltd.
Mr Ratan Tata, Chairman of the Tata group, unveiled the company's new name here on Tuesday.
The company's new brand, !dea, will replace the existing brands of AT&T in Maharashtra, Goa and Gujarat, Tata Cellular in Andhra Pradesh, and RPG Cellular in Madhya Pradesh and Chhattisgarh. It will be shortly launched in Delhi, the National capital region.
The company's new pre-paid service will be called !dea Chit Chat.
Idea Cellular is an equal three-way joint venture between the Tata group, AV Birla group and AT&T, formed by the merger of Tata Cellular with Birla-AT&T. The company would assume its new name once formal permission was obtained from the Registrar of Companies, said Mr Sanjeev Aga, President and CEO, Idea Cellular, at a news conference on Tuesday.
The company has introduced its common pan-India brand at a time when it is in talks with BPL Communications for a merger of cellular operations. Company officials declined to comment on whether the branding exercise had taken into account this possible merger. "Obviously, we will not go through this exercise if we did not have some kind of long-term plan for it," said Mr Aga.
"Idea Cellular has direct equity of Rs 2,240 crore invested over the past five years," said Mr Aga. Although the original parties to the joint venture had achieved individual financial closure, the company was having its second financial closure for the merged entity, he said.
"Our almost 100 per cent sponsored equity and clean capital structure allows us huge leveraging potential, providing the business with multiple leveraging options to grow organically and inorganically; whether it be an IPO or share-swap, our options are open," he said.
While the equity amounts to Rs 2,240 crore, debt both rupee and forex will have roughly the same ballpark figure; debt and equity roughly totalling Rs 4,500 crore, said the officials.
Over the next 10 days, the company's mass media campaign for the new brand will be rolled out across the country.
The new brand also comes at a time when the company is a few months away from launching in Delhi, for which otherwise, still another brand name would have to be thought up, said officials.
Idea Cellular had a subscriber base of 8.5 lakh and registered a growth of 135 per cent over the financial year ended March 31, 2002, outpacing the industry average of 80 per cent, said Mr Aga. The company has 45 per cent of the Indian telephony potential in its footprint.
During the last financial year, the company invested Rs 500 crore in its networks, with the number of towns it covered reaching 480. The company's 2.5G network was ready, said Mr Aga.
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