Idea Cellular: From strength to strength

Himanshu Kapania        Print Edition: Aug 5, 2012

In 2005/06, Idea Cellular was a regional player covering only 40 per cent of India. Our turnover back then totalled Rs 3,500 crore. We could have gone around building this company like a timid bit player, but we had the courage to act like a leader. In spite of the uncertain regulatory environment and the sector reeling under pressure from a series of policy flip flops, Idea has performed consistently and set high standards of compliance and reporting.

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In 2007, some companies mistakenly thought that the competitive barrier in the telecom sector was a piece of paper, a licence. In this sector you have to contend with India's finest and the world's most ferocious competitors in trying conditions. Every management discipline is stress tested day in and day out.

The last four years have seen us make a sustained effort to build capacity, expanding our base station count from 4,000 to 100,000 and laying 65,000 kilometres of fibre optic cable. We also started the Internet service business. In 2011, Idea acquired 3G licences for 11 circles for Rs 5,800 crore. We have also built a massive contact centre that seats 25,000 call centre executives. We have service centres in 4,000 towns. We now contribute in excess of $1 billion to our group EBITDA, accounting for 18 per cent of the total.

Since 2005/06, we have grown six times to over Rs 19,500 crore (2011/12) and are now a national player. In financial year 2012, Idea, now the third largest mobile operator in India, retained its position as the fastest growing for the fourth year running. We recorded 26 per cent year-on-year growth in revenue - twice the industry rate. Despite operating in extremely competitive market conditions, our revenue market share (RMS) grew 1.4 per cent year on year, consolidating Idea's position and giving it 15 per cent RMS in a 14-player market - third highest after Bharti and Vodafone.

THE CASE
Idea faced pressure from stiff competition and a tough regulatory environment
THE STRATEGY
Mobilised finances, built capacity, expanded nationwide, improved customer service



We have consistently stayed at the top in terms of quality of subscribers and recently entered the select club of global operators with over 100 million customers. Our ratio of active subscribers to reported subscribers is over 93 per cent, the highest, and way above the industry average of 74 per cent.

From 30,000 villages our presence has expanded to 300,000 towns and villages, through 1.5 million retailers. We made an initial public offering in 2007, which helped mobilise finances. Today, we are among the top 35 listed Indian companies. Globally, Idea is ranked among the top 10 country operators in the world, with traffic in excess of 1.4 billion minutes a day.

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From finance mobilisation, nationwide network rollouts and building the country's most extensive distribution network, to setting up responsive contact and service centres or evolved information technology processes, Idea is a transformed company.

With three million shareholders, 116 million customers, and 7,661 employees, we are confident that the company will not only tide over the current regulatory headwinds, but consolidate its position further and emerge stronger.

The author is Managing Director, Idea Cellular

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