Idea Cellular calls in to 4G services network

AVB firm owns 4G spectrum in the 1,800 Mhz in 10 circles

Aditya Birla group company Idea Cellular is planning to roll out the fourth generation (4G) services in six service areas by the end of the current financial year (FY16).

“Idea aims to launch 4G services in Maharashtra, Kerala, Madhya Pradesh, Punjab, Haryana and Andhra Pradesh by the end of the current fiscal (FY16),” the telecom company’s management indicated in a conference call.

According to PhillipCapital, these six service areas account for 53 per cent of Idea’s revenues provide for a significantly higher proportion of its EBIDTA and it will significantly augment its customer offering and provide a strong counter to both Bharti Airtel and Reliance Jio in terms of product offering. While Airtel has already launched its 4G services, Reliance Jio is expected to roll out its services by the end of December 2015.

Idea owns 4G spectrum in the 1,800 Mhz in 10 circles and the plan is to extend the rollout as soon as possible.

“The company intends to roll out 4G services in 750 cities and towns across 10 circles in the first phase of rollout which is likely to be completed by the first half of calendar year 2016,” the management indicated.

The management also said that it is working quite aggressively to expand its mobile broadband network (MBB) footprint.

“The company is looking to rollout a combined 30,000-35,000 3G and 4G cell sites over the next nine months to take its end-FY2016 3G/4G combined cell site footprint to around 60,000-65,000,” the management said. According to Kotak, this expansion would enhance its MBB population coverage to around 450 mn from the current 275 mn (excluding 3G intra-circle roaming). According to Kotak, Idea indicated that it had 42 mn smartphones on its network as at end-June 2015, of which only around 16 mn were using 3G data services. Around 1.7 million of these smartphones were long-term evoluvtion (LTE) handsets and only a minor proportion of these support voice over LTE.

But despite all this plans, the management did maintain its capital expenditure guidance for FY16. “We plan to have a capex of Rs 6,000 crore-Rs 6,500 crore for FY16 and the capex intensity (ex-spectrum) is unlikely to increase (from current guidance) over the medium term (2-3 years),’ the management said.