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Interview with Himanshu Kapania, Deputy Managing Director, Idea Cellular

January 27, 2011
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Himanshu Kapania, deputy managing director, Idea Cellular, who is soon to take over from Sanjeev Aga as MD of the company, has his work cut out, given the stiff competition in the industry. Kapania discusses the launch of MNP and 3G services, which will take the industry to the next level of growth. Excerpts... 

What have been the key milestones for Idea in 2010? 

Having launched services in all 22 circles by December 2009, Idea entered 2010 as a pan-Indian operator for the first time in the history of its operations. The company maintained its growth momentum and soon became the third largest mobile operator in India in revenue terms.

Idea grew its revenue market share by 1 per cent despite competitive market conditions and dwindling ARPUs. Growth in both revenue and minutes of use on the Idea network are a signal of the company’s growing size and stature in the Indian telephony sector. Idea’s strong financial performance has enabled it to ride out of testing times and emerge competitively enhanced.

The year 2010 witnessed a landmark event in the history of the Indian telecom industry – the 3G spectrum auction. Idea won the bid in 11 key circles, which contribute over 80 per cent of the company’s revenues, and the company’s strategy received a thumbs-up from key stakeholders and opinion leaders. We are now ready to offer the gold standard in terms of 3G mobile and data services to our over 81 million subscribers across the country. Through alliances with key leading operators, we will offer 3G services to subscribers across the country.

Idea became the first major operator to initiate mobile banking services by forging an alliance with Axis Bank for a pilot project on money remittance. Idea’s focus on enhancing the customer experience through superior service delivery led to the setting up of the country’s service network by a telecom company. Idea now has nearly 2,600 service centres across the country. Idea realised the need to have a robust, scalable, integrated and state-of-the-art customer relationship management (CRM) application to provide consistent and quality customer experience. Touted as one of the best CRM tools in the world, Idea deployed “Crystal”, an Oracle Siebel CRM 8.0 software.

In 2010, Idea extended its network by adding over 5,600 cell sites to take its overall tally to over 70,000 sites, bringing in its fold over 41,500 towns across the country. During the year, Idea continued its brand building efforts to emerge as one of the buzziest brands not just in the sector, but across categories. The company launched some memorable brand campaigns around its popular “What an Idea Sirji” series such as the “Use Mobile, Save Paper” and “Break the Language Barrier” theme campaigns. More recently, Idea took the lead in spreading mobile number portability (MNP) awareness amongst 700 million mobile subscribers across the country.

The company was recognised as the “Emerging Company of Year” and the “Most Customer Responsive Company” in the telecom sector in 2010.

What are your expectations for 2011? What will be the key drivers for growth? 

The year 2011 will usher in the much-awaited 3G and MNP services. We believe that a national operator such as Idea, having strengths in the field of network connectivity, service delivery, strong brand and unique product offerings, will have an edge going forward.

What are your plans and expectations from 3G and BWA services? 

In an environment where there are 14 operators and spectrum is scarce, 3G will initially decongest networks. The result will be improved voice calls, followed by the take-off of high-end data services. Idea will launch 3G services across the country in early 2011. The company holds 3G spectrum in 11 circles and will partner with other leading operators to extend 3G services to Idea subscribers in other parts of the country.

What major trends do you foresee in the sector, going forward? 

The telecom sector has been plagued by the winds of contentious policy execution and the new minister is trying his best to resolve old issues. Going forward, the focus of the industry will remain on broadband, spectrum and infrastructure.

The launch of MNP and 3G during the first quarter of calendar year 2011 will see many changes in the types of services being offered. With ARPU levels going down, the overall revenue growth is unlikely to mirror the past years. The negative impact of cost pressures will result in a greater focus on scale and volume to keep overall costs under control.

Customers will benefit from the launch of new services, and the pace of overall growth in the sector should continue unabated. The emergence of new devices will boost overall usage of mobile networks. After 15 years of mobility, the country is now ready to savour the fruits of wireless broadband through a plethora of devices and applications that will whet the appetite for more.

What are some of the challenges that need to be addressed? 

The present environment is one of concern. On the one hand there are cost pressures, and on the other, there are concerns related to taxes and levies, which need urgent review.

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