Aditya Birla group company Idea Cellular is fighting an uphill task in the Indian Telecommunications sector – Spectrum, M&A, etc yet the the company is putting a brave front.
Idea Cellular with an Intra Circle Roaming arrangement with Airtel and Vodafone has PAN India 3G Coverage. The management of the company reported that it has witnessed a 30% QoQ Growth in Data Traffic though Revenue may not be directly proportional because of the reduction in Tariffs.
Idea Cellular has 3.1 Mn active subscribers with an addition of 500,000 in the quarter ending June-12. 3G Data ARPU / User / month was Rs 88 with average data usage of 375 MB. Wireless Data contributes 4.8% of total Revenues.
Mr. Himansu Kapania on Idea Cellular’s 3G strategy,
For now the Intra-Circle roaming arrangements will continue. When you benchmark Idea’s 3G data Tariffs Globally, we are still the lowest. Cost of producing 3G Data / MB will include Spectrum Charges, Investments in Network, IT, etc and thus is expected to remain a tad higher. Fall in device prices, development of eco-system, mainly content and applications will drive 3G data growth. Idea will not do its own AppStore it is open source platforms that have succeeded and will collaborate with them.
Idea Cellular 2G Voice Business:
Eight New circles where Idea has started providing 2G Services are still in Red and it maybe a while for the company to see the light at the end of the tunnel. It may get further delayed if the Reserve Price of the 2G Spectrum is going to be as prescribed by TRAI. To some extent rise in Service Tax, Overcapacity and Tariff War has led to give a guidance of Muted Growth for first half of FY 2012-13.
Idea Cellular has 15% Revenue Market Share and 15.3% VLR Subscribers Market Share. For June 2012, quarter Idea carried 131 Bn minutes of Voice traffic, 22 Bn more compared to the same quarter a year ago.
Idea’s CAPEX will be higher in Q2 compared to Q1 and will be much higher in Q3 and Q4 compared to Q2. Most of this will go in back-haul and not necessarily expanding the wireless coverage. Idea like other telecom operators faces uncertainty on existing spectrum as well as that of cancelled licenses in few circles.