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Idea Cellular, which on Monday beat analysts’ estimates by posting a good set of numbers, would continue the push to improve its voice services and data realisation rather than increasing its headline tariffs. Managing director and CEO Himanshu Kapania spoke to FE’s Rhik Kundu after the company declared its April-June numbers. Excerpts:
The Trai on Monday released the spectrum sharing guidelines. How do you see them?
I won’t be able to comment as I am yet to read them.
Mobile operators, including Idea, have been raising their realisations from tariffs by removing freebies but they haven’t touched headline tariffs yet. How long can operators like you continue by not increasing the headline tariffs?
Idea Cellular is focused on increasing its overall realised rates. And this quarter we had an improvement of 3.3% in average realised rate. Further, voice realisation rates have improved and the contribution of mobile data realisation rate has improved too. We would continue with our push to improve voice and mobile data realisation rates in the coming quarters rather than increasing our headline tariffs.
Your capex has more or less stood at around R3,500 crore in the last few fiscals? Do you have any plans to increase this?
We have been steady in investment at around R3,500 crore, as per our guidance, in the last few fiscasls. In the past our focus was expansion of 2G services and we are more or less on the end of expansion of our 2G GSM services. We added 14,000 GSM sites last year. Now we turn our attention to 3G. We expanded by about 5,000 sites last fiscal. But, even as we speak only 30-40% of the circles that have 3G spectrum have 3G coverage. We have to expand 3G in those circles. The factors affecting this expansion are higher adoption by subscribers. It is surprising that 3G growth in the country has been extremely slow. As we speak, only 7.5% of our overall subscriber base are hooked to 3G. Only when consumers are willing to invest in handsets worth R5,000-10,000, will this 3G expansion be a reality.
In the next round of licence renewal a big chunk of licences of Idea would be coming up. In all these circles the company has 900 MHz spectrum. In a scenario where you fail to win them back in auctions, what will be the fallback option since this time there won’t be enough 1,800