The Hindu Business Line : Idea Cellular to complete pan-India rollout this month

(from left) Mr Himanshu Kapania, COO of Idea Cellular; Mr Arnaud Soubelet, CEO of Alcatel-Lucent Network Management Services India Ltd; Dr Indira, Professor at Loyola Institute of Business Administration (LIBA) and Mr Kumar Ramanathan, CMO of Vodafone, at a session on ‘Business Models in Telecom’, organised as part of LIBA Insight’09, in Chennai on Friday. —

Our Bureau

Chennai, Nov. 6 From the middle of this month, Idea Cellular will be truly pan-India, as the operator is in the final stages of roll-out in the last couple of circles.

All the big-ticket investments in infrastructure are complete and now begins the time to harvest the benefits, says Mr Himanshu Kapania, Director, Operations, Idea Cellular Ltd.

Idea Cellular is among India’s leading GMS-based mobile telephony service providers, with a subscriber base of 51 million. The Aditya Birla Group company has 11 per cent share in the telecom (revenue) market, but Mr Kapania likes to look at the market share in a different way.

Idea was for many years present in 11 circles; only recently did it start expanding its presence across the country. According to Mr Kapania, the 11 circles that Idea has long been present in account for 61 per cent of the country’s telecom market, by revenue.

Idea has a 20 per cent share of this market, he told journalists, on the sidelines of a conference organised here by the Loyola Institute of Business Administration, on the theme Riding the New Wave: Emergence of New Business Models.

Now, its pan-India presence will help Idea leverage its strength in the first 11 circles, Mr Kapania said. Revenues will go up — for instance, when a subscriber from one of the first 11 circles travels to one of the latter 11 circles and makes a call, the revenues would all accrue to Idea.

Mr Kapania said that Idea has completed investing 65 per cent of the current year’s planned capex of Rs 4,500 crore, which comes on top of another Rs 5,000 crore last year.

Idea projects revenues of Rs 14,000 crore for the current year. Its revenues in the first half of the year were Rs 5,779 crore (net profit Rs 558 crore).

Idea is also a very low-debt company, with debt forming 42 per cent of its net worth. This gives the company an ability to borrow, if need for funds arises to meet competition, Mr Kapania said.

Forty per cent of Idea’s subscribers are rural-based. Mr Kapania does not think this is necessarily a negative when it comes to offering value-added services because the prices of these services would also come down just as the tariffs for voice have over the years.

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