The Hindu Business Line : Idea Cellular bets big on 3G, WiMAX

3G is the third generation telecom network which will bring faster data access to subscribers who want to connect to the Internet. A WiMAX (Worldwide Interoperability for Microwave Access) network will mean users can avail themselves of high-speed broadband Internet wirelessly over their laptops.

The Aditya Birla owned company has 3G ready networks as it has sourced latest equipment from global vendors. Hence upgrading to 3G will not be an issue, said sources.

The worldwide 3G subscriber base is expected to be 540 million in 2010, according to market researcher InStat.

Trials in 3 cities

Idea is simultaneously conducting indoor WiMAX trials in three cities - Pune, Bangalore and Kochi. The Government has freed spectrum for a limited amount of time for Idea and a few other operators to conduct indoor and outdoor trials in various parts of the country.

Eyes rural circles

Idea also plans to enter rural and neglected circles as a strategy to gain subscribers.

The company recently filed for an IPO with SEBI and hopes to use part of the funds to roll out network in Bihar. It has paid Rs 10 crore as licence fees to enter the state. The state suffers a tele-penetration of just 7 per cent, compared to a national teledensity average of 14 per cent.

However, Bihar is the third most populated circle in the country, according to sources. The North East, another circle where telecom revolution is still in its early stages, is also on Idea's radar.

The operator will begin to catch up with other players with its new backing by a single promoter - the Birla group. It plans to `cover gaps quickly', reported sources on Thursday.

Other advancements in the telecom industry will help it cut costs - use of e-mail to send bills to customers; sharing cell sites; smaller base transmission stations that will mean lesser infrastructure requirements and expenses and independent tower operators. Along with its plan to go for a national long distance licence, it will also look at international long distance in the near future.

Idea has a net worth of Rs 600 crore while its accumulated losses are in the range of Rs 1,500 crore. It has 1.3 crore subscribers and an average revenue per user of Rs 376. The market share owned by the operator is 8.4 per cent.

The company's IPO is expected to fetch Rs 2,500 crore. It has also opted for 15 per cent greenshoe option, which will bring the value to Rs 2,875 crore. It plans to pay back preferential shares worth Rs 600 crore once the IPO is out by mid-Februrary.

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