Monday, March 18, 2013

The ‘IDEA’ For A Change

The Operator with the Punch Line ‘An Idea Can Change Your Life’ has felt its mark in The Telecom Space. The Company has fared well in FY2010 and now have High Hope with 3G and MNP.

Every corporate houses posses a dream of becoming a part of the Great Indian Telecom Story. While giants like Tatas had realised the potential of the services long back and had become the part of the telecom growth in the early days, players like Reliance entered a little late. Corporate houses like Future Group, Unitech are latest incumbent in the race. But, making a dent in the high competition telecom market – having 15 players and ailing with falling ARPU, shrinking margins – has been a harrowing task for all of them. However, Idea Cellular is the one that has stood the test of the time and is the only telecom player to have made it to this year’s edition of B&E’s Fastest Growing Companies in India.

The $29 billion Aditya Birla Group had a fair amount of “IDEA” about the potential of telecom industry at the dawn of the sector in the mid 90s. The first telecom licence was awarded to the Group in December 1995 in the high ARPU Maharashtra and Gujarat Service Areas followed by the launch of services in the 1997. The company went slow with plans in the first decade of its inception, as during the period mobile telephony was the service of classes. However, Idea became aggressive in 2007 after getting the pan India licence. In fact, by the end of FY2010 it had rolled out its services across all 22 telecom circles in the country.

But, the company’s fortune took a north after it started rolling out services across all the circles. From a mere 12.44 million subscriber base by the end of December 2006, Idea Cellular services are subscribed by 74.2 million people today. It’s market share has also witnessed a significant jump with more than 10% market share already in its kitty.

Idea Cellular’s aggressive expansion plans also included M&As. In fact, in June 2001, it forayed into Madhya Pradesh Service Area after acquiring RPG Cellcom. Similarly, after acquiring Escotel Mobile Communication in early 2004, it started offering services in Haryana, UP (WEST) and Kerala. Spice Communications operating in Karnataka and Punjab was also acquired by Idea. It’s because of these organic and inorganic strategies that Idea today is the sixth largest telecom player in India.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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