Wednesday, April 13, 2011

Idea plans 3G tie-ups to cover non-licence areas

India’s third largest mobile operator, Idea Cellular, hopes to gain hopes to gain significantly from mobile number
portability (MNP) that is expected to create a churn in 3G subscribers following a price war among operators.

Idea has already gained the most from MNP, with a net addition of 4 lakh subscribers, taking its total subscriber base to 89 million users. “Number portability is aimed at enabling customers to shift from one operator to another, irrespective of whether it is 2G or 3G services,” said Ambrish Jain, deputy MD, Idea Cellular, on Tuesday after launching the company’s 3G service in Andhra Pradesh.

Jain said Idea is also preparing to enter into pacts with select mobile operators for specific areas where it did not have 3G licence. “These alliances will enable Idea subscribers throughout the country to enjoy 3G services apart from deriving the benefit of national roaming,” he said without elaborating on the timeframe for these pacts to come into effect.

Last week, Bharti Airtel, while launching its 3G services in Hyderabad, also said that it was looking to partner with other mobile operators to offer services in areas where it does not have licence. Jain said margins of Idea Cellular were under pressure due to a slide in the average revenue per user (ARPU). However, he said, the company is optimistic about compensating for the decline in ARPU with increased revenue from value-added services, particularly 3G services. “A hundred-fold expansion in data usage, with the adoption of 3G services, is likely in three to four years,” he said.

While Idea’s ARPU at present ranges from Rs 172 to Rs 200, the 3G services are expected to arrest any further decline in average revenue per user.

The average spend on data usage in India is only $ 0.3 against the world average of $ 4 and $ 21 in Japan. Typically, data services account for 28 per cent of revenue and voice contributes the remaining 72 per cent. But this is likely to change in two years with data contributing at least a third of revenue, he said.

Idea Cellular had traffic of over one billion minutes per day as of December 2010, compared with 697 million minutes per day a year ago.

Jain declined to comment on the DoT’s intent to issue showcause notices to Idea with respect to overlapping of licences, saying “the matter is sub-judice”. In 2008, Idea had picked up a stake in Spice resulting in a situation where both Idea and Spice held licences in Punjab, Haryana, Maharashtra, Karnataka and Andhra circles. Idea maintained that it did not breach any licence agreement. In March, additional solicitor general of India Amarjit Singh Chandhiok suggested a penalty of Rs 300 crore on the company.source

1 comment:

  1. Idea network works everywhere that's why this is the main reason of popularity of this network in large area of the country. This time Idea has decided to introduce new idea plans just because of its popularity and competition to other networks.