The Hindu Business Line : Decks cleared for Idea Cellular's foray in Mumbai

The Department of Telecom has given its nod to Idea Cellular's application for taking a licence for the Mumbai circle. Idea had applied for the licence a year ago, but the proposal was held back by DoT because the Tata Group was a joint venture partner in the company.

The Tatas already operate mobile services in Mumbai under the Tata Teleservices umbrella. As per the existing licensing norms, a single entity cannot own more than 10 per cent in two different companies in the same circle.

However, with Tatas exiting Idea Cellular, DoT has now decided to give its approval for the application. As per Idea's application, the company's net worth is at Rs 1,042 crore and paid-up equity share capital is at Rs 2,259 crore.

Birla Group holds 100 per cent equity in the company through Aditya Birla Neuvo (28.2 per cent), Birla TMT (44.88 per cent) and the balance with Hindalco Industries, Aditya Birla Telecom and Mauritius-based investment vehicle Goodison Investments. While the company has the option to take a licence for Mumbai, it can also look at buying out BPL's existing network, now owned by the Essar Group.

Pan-India licence

Idea Cellular has also applied for a pan-India licence. The company has licences for 11 circles, of which eight are operational. Idea has applied for 12 more licences under the unified access category.

The move will give the cellular company a pan-India footprint to compete with the likes of Bharti Airtel, Hutch and Reliance Communication.

While all the major operators have presence in Mumbai and the other metros, Idea Cellular at present has licence for Delhi Circle only.

Idea Cellular has also taken the letter of intent for a long distance telephony licence and is set to become an integrated telecom services player.

The company is embarking on a major expansion plan over the next six months, which include an Initial Public Offering. Idea has nearly 10 million subscribers across Delhi, Maharashtra, Gujarat, Kerala, Uttar Pradesh (East and West), Rajasthan and Madhya Pradesh.