In
the communications business last year, it was not only Bharti, Reliance, or BSNL
and MTNL that hit the headlines. At least in the second half of the FY 2004–05,
Idea Cellular attracted good attention.
First, Cingular Wireless decided to put on the block its stake in the company
for about $390 million. Singapore Technologies Telemedia (STT) and Telekom
Malaysia (TMI) consortium expressed their desire to buy this stake. But the DoT
dashed their intentions saying that the same company could not hold more than a
10 percent stake in two operating companies in the same telecom circle.
At the moment, Tatas have 31.7 percent, Birlas have 33.7 percent, Cingular
Wireless has 32.9 percent, and AIG has 1.7 percent.
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|
| CEO: Vikram Mehmi |
| Area of Operation:
Cellular services |
Address: Idea Cellular
11/1, Sharada Centre, Off. Karve Road,
Pune - 411004, Maharashtra |
| Phone: +91 9822003011 |
| Fax: +91 20 56412222 |
| Website: www.ideacellular.com |
|
|
|
| V&D
estimates |
CyberMedia
Research
|
|
| Highlights |
| • |
Bid to sell off 47 percent stake fails; exploring equity market or stake sale this year |
| • |
Covers 300 cities, 850 towns, and over 6,000 km of highway in 8 circles with 5.07 million subscribers |
| • |
Plans almost Rs 1,300 crore capex in FY 2005–06, 40 percent network growth |
| • |
One lakh customers on GPRS-EDGE services with seven percent of revenue coming from non-voice service |
|
With this attempt failing, Idea promoters may be exploring other options such
as IPO to fund the expansion. They are also in talks with groups such as Maxis
of Malaysia, Orascom Telecom Holding of Egypt, Systema Telcom of Russia, and
Telenor of Norway to sell the 47 percent stake.
At the moment, Idea officials deny any lack of funds and are going ahead with
new network rollouts in three new circles of Rajasthan, Uttar Pradesh (East),
and Himachal Pradesh. The planned capex for FY 2005–06 is almost double of the
Rs 650 crore of FY 2004–05. The revenues climbing almost 83 percent indicate
the company's health. In FY 2004–05, the company recorded a revenue of Rs
2,409 crore. Of this revenue, 70 percent came from the voice services. The rest
30 included: 10 percent from interconnect charges, 13 percent from roaming, and
seven percent from value added services or non-voice services like GRPS-EDGE and
other downloads. Its one lakh subscribers of GRPS-EDGE can send any other
operator back to revisit their data strategy. And with plans to double its VAS
revenues, Idea is all set to grab a major chunk in this segment of the market.
Like any Indian operator, Idea also does not want to be judged on ARPUs. With
a 75:25 pre-paid to post-paid split and customer churn well under control, the
company is free to launch innovative tariffs and value-added services to attract
new customers and consolidate the existing ones. Also, while other operators
seem to struggle when it comes to quality of service, VOICE&DATA ranked Idea
at number two spot in terms of QoS.
Idea too has applied for 3G spectrum, and the company plans to roll out when
there is a need in the market. The company believes in creating value first and
them taking 3G to the customers. This does not mean Idea does not have 3G plans
but at the moment they are going ahead with 2.5G network roll outs and keeping
their customers satisfied.
Looking ahead the company would not mind acquiring smaller operators. But the
plus point for Idea has been its tariffs i.e. 75 paise per minute and would not
hesitate to go down further to remain in the market.
If Idea decides to go for an IPO, it would be the third-most awaited IPO
after Hutch and Reliance. If not it would be interesting to watch how Idea moves
fulfill the dream of becoming most profitable cellular company in India in next
couple of year. n
Next Page : "3G hype is more a means to acquire spectrum"
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