After Idea Cellular launched 4G services in December, it has ramped up its presence to 575 towns.
The telecom company, which has 4G spectrum in 10 circles, has rolled out 14,000 sites for 4G services in 100 days, covering 125 million people.
Of the 575 towns where it has launched 4G, Idea Cellular has the first mover advantage in 250 towns and has garnered 6 million subscribers. BusinessLine met Himanshu Kapania, Idea Cellular’s Managing Director who spoke about plans to expand the mobile broadband services. Excerpts:
What is the update on your 4G roll-out?
It is the fastest roll-out as in 100 days, we have 4G coverage in 575 towns across 10 circles. Our commitment is to reach 750 towns by June. There are 14,000 base stations we rolled out in, over these 100 days.
Two years back we had 22,000 3G sites. In the last two years, we have rolled out 28,000 additional sites for 3G.
Now our 3G and 4G combined broadband coverage is at 400 million of the population. It was at 200 million two years back.
What has been the response from the towns you moved first?
The response from small and mid-sized towns has been better than larger towns.
Larger towns have options in terms of other operators and technology.
In smaller towns, we are the only operators with 4G services, and users are experiencing broadband for the first time.
The next battle in telecom is clearly about network quality. How are you approaching this?
We are doing our roll-out scientifically. As more users come onto data, it will become a battle of capacities. We are building larger capacities as demand grows. But we are not building ahead of time.
We are using analytics to study user demand and having understood his needs, how he uses applications, and what device he has – we prioritise the roll out accordingly. But even with 50,000 3G sites and 14,000 sites for 4G, there are pockets where we have to cover.
What is your view on the MVNO policy?
We will have to see the fine print first, but spectrum in India is so expensive that you cannot sustain business by selling voice or data cheap. The market is highly competitive and there are choices for consumers. If there are 40 players in the market, it becomes difficult.
Given that most operators are buying spectrum, are intra-circle roaming arrangements still relevant?
There is a short-term need to plug gaps in coverage. There are pockets where operators may not have coverage, but users demand it.
Idea has broadband coverage in all 22 circles, between 3G and 4G. But we may adopt models such as ICR or MVNO in geographies where we are not strong – in the short term – till we generate cash to tide over the immediate gap.
There is no point duplicating assets if there is not enough demand.
Are you worried about possible pricing pressure on data with new entrant RJio?
Telecom is a business of scale, not of pricing. India follows a 100-400-500 approach. There are 100 million Indians who are elite, and are already on 3G or 4G, there are the next 400 million Indians who have adopted 3G and likely to adopt 4G.
There are also the next 500 million, with aspirations to move to 3G and 4G, but may not have the finance to afford it. Voice covers all of these categories.
Mobile data has covered only the first 100 million fully. Since coverage is expanding and devices are affordable, the next 400 million is beginning to spend on data. Every price drop in the past has not really impacted us.
If you look at Idea, our EBITDA have been growing at CAGR of 30 per cent in the last nine years. Over the last three years, we have improved margins by 10 per cent in an era when prices have fallen.
Now that the spectrum trading deal with Videocon has fallen through, what are your options for acquiring spectrum?
TRAI has announced the total quantum of spectrum, thereby bringing certainty. When we went into the Videocon deal, there was no certainty. But now, going by the TRAI announcement, we are moving from scarcity of spectrum to surplus.
The total quantum of spectrum is large and we can be selective in our purchase. We can buy spectrum according to the demand. From making forced buys at a premium, we can shift towards buying spectrum based on need.