Idea Cellular plans Rs 4000 cr capex

The Aditya Birla group company Idea Cellular has lined up Rs 4,000 crore capital expenditure in the current financial year to expand its network coverage in the existing circles as well as enter new circles.

“While the company has already filed a red herring prospectus with the Securities Exchange Board of India for its initial public offering to mop up Rs 2,500 crore. It will raise the balance through internal accruals,” said Managing Director Sanjeev Aga.

The wireless telephony company had already obtained licences to roll out its services in Mumbai and Bihar circles by paying licence fees of Rs 204 crore and Rs 10 crore respectively.

“In September last year, we launched our services in three new circles – east UP, Rajasthan and Himachal Pradesh. With the latest additions, the number of circles we are operating in will go up to 13,” Aga said.

Besides, the company has already applied to the Department of Telecom for licences to kick off its services in Karnataka, Punjab, Tamil Nadu, West Bengal, Assam, Orissa and Jammu & Kashmir.

“The government will release some fresh spectrum in February-March, and we expect to enter a few more circles with this,” company sources said.

Aga said the company would adopt a two-pronged strategy in bringing subscribers within its fold in Bihar and Mumbai. He said at about 6-7 per cent the cellular penetration in Bihar was half the national average of 14 per cent.

“So there is an unpenetrated market in the state, which gives us great scope for growth,” he added. In Mumbai, the teledensity is about 50 per cent, which is almost four times the national average and is estimated to grow beyond 100 per cent over a few years.

“We are thinking of addressing this market with a combination of efficiency and innovation,” Aga said.

Idea is going to offer international roaming services to its pre-paid customers over three-four months.

Besides, it plans to provide its subscribers with a value-added service which will enable them to download favourite ring tones from the mobiles of the persons they are calling. This they can do by pressing one particular number in their handsets.

“We are one of the pioneers in introducing innovative services and were the first to introduce GPRS service in Delhi. Innovation and efficiency will continue to drive our future growth,” Aga said.

Idea has obtained the NLD (national long distance licence) and is also planning to apply for the international long distance licence.