Idea Cellular to pump-in Rs 500 crore this year

Facing fierce competition all around, cellular operators are now, on their way to provide the best of class service with better infrastructure in place. Following this trend, Idea cellular has announced that it would pump in Rs 500 crore this year to improve its infrastructure in all the circles, where it is operating. The company is also expecting to add another one million subscribers this year. It currently has 1.3 million subscribers in seven states.

Idea would pump in Rs 500 crore in all the seven circles where it is operating, which includes Gujarat, Maharashtra excluding Mumbai, Goa, Andhra Pradesh, Madhya Pradesh, Chattisgarh and Delhi. It would use the money in building new cell sites, installing IVR's, call centers and to improve its IT infrastructure. The company currently has 362 sites in Delhi and would 50 more to its capacity. In other circles too, the company is planning to add more cell sites to its capacity.

Vikram Mehmi, CFO, Idea said, " Idea has always been the front runner in providing the best of the technology to its customers. We will keep on investing to add value to our service." The company recently parted ways from Bharti and tied-up with BSNL for providing long distance calls. "It's not an exclusive arrangement and since we have the option available we will tie-up with the provider who gives service at cheaper rates," added Mehmi. In line with the Telecom Regulatory Authority of India's interconnect usage charge (IUC) norms, BSNL was charging Rs 1.10 a minute for carrying STD calls compared to Bharti's rate of Rs 1.49 a minute. BSNL was also offering discounts of up to 10 percent to cellular firms. That apart, BSNL had allowed the firms to fix their retail tariff, and thus maximize their margins. 

Bharti, on the other hand, had fixed STD tariffs at Rs 2.99. Analysts have already predicted that cellular operators would keep moving from one long distance provider to another for better margins till the carrier access codes (CAC) were put in place. Once CAC was introduced, it would be up to the consumer to choose the operator The total equity of Idea Cellular is approximately Rs 2,500 crore and the three partners - Tatas, Birlas, and AT&T account for almost the entire stake of the company.

Rahul Gupta


(CNS)