Top10: 10 - Aircel: Turning A New Leaf

VoicenData Bureau
New Update

The fiscal 2005-06 was a watershed year in the company's

history as a new management took over the reins from the promotor, C

Sivasankaran. The fifth largest public company in Malaysia----Maxis

Communications Berhad-acquired Aircel with an overall holding of 74%, as a

result of its 65% direct stake, and 9% indirect stake via its participation in

Deccan Digital Networks. Deccan Digital is the joint venture company (JVC) set

up by Maxis with the Chennai-based Reddy family. The JVC will own a 35% direct

stake in Aircel.



Area of operation: Mobile services

Address: Aircel Ltd, Sterling Towers, 327, Anna Salai, Teynampet, Chennai
600 006

Phone: +91-44-4313001

Fax: +91-44-4313036

In total, Maxis will directly invest Rs 3,225 crore ($702

mn) for its equity interest, while the JVC will invest the remaining Rs 1,736

crore ($378 mn).

Aircel showed impressive growth of 57%. In FY 2005-06, it

had posted a revenue of 880 crore. As on March 31, 2006, the total cellular

subscribers were 26.12 lakh, which is a jump of 48.4% over last year's figure

of 17.6 lakh. The company has 2,180 BTS covering 858 towns in India.


Aircel's parent company, Sterling Infotech Group, was

lucky in its fourth attempt to sell off the operator. For Maxis, this

acquisition provided an opportunity to build a strong foothold in India, as it

presents an attractive high growth with a low mobile penetration market.

According to Maxis, Aircel contributed a pre-tax profit of Rs 20 crore to the

Maxis Group in Q1 2006. The Group has accounted for the Indian operations as a

26% associate using equity accounting from January 6, 2006 to March 20, 2006 and

subsequently, consolidated as a subsidiary of the Group at 99.3% economic

interest from March 21, 2006 to March 31, 2006.

The Tamil Nadu-based mobile operator stepped out of its

regional mode and has paced up its aggressive plans to be a pan-India player.

Aircel is focused on expanding its services to 5 new circles by year-end. Maxis

hopes that when all 12 circles come into operations, Aircel will serve 58% of

India's total population or an estimated 63.5 crore.


  • Got acquired by Malaysian telecom

    giant, Maxis Communications
  • Aiming to operate in 12 circles by end

    of 2006
  • Extended coverage in 600 towns in

    Tamil Nadu 


In addition to its existing circles of Chennai and Tamil

Nadu, it has launched services in five new circles - West Bengal, Orissa

(March 2006), Assam, North East (Nov 2005), and Jammu & Kashmir (August

2005).  The company expects to roll

out services in five other markets - Bihar, Himachal Pradesh, Madhya Pradesh,

Uttar Pradesh (East), and Uttar Pradesh (West) by the year-end. The company has

also applied for licenses for Haryana, Kolkata, Kerala, Punjab, Mumbai,

Karnataka, Rajasthan, and Maharashtra.

Aircel extended its coverage to 600 towns in Tamil Nadu and

plans to bring 250 more towns under its network before the end of this financial

year. This push into smaller towns will also see the number of its towers going

up from 1,500 to 2,400 by the end of the year.

'We'll foray into new telecom circles'

What has changed since the acquisition by Maxis?

The year 2005-2006 saw the merger of Aircel with

Maxis and it was a milestone not only for Aircel, but also for the

cellular phone user community in India.



KVP Baskar

In most ways, we are still the same-we are a young

and vibrant telecommunications company dedicated to bringing great service

and value in a very simple and approachable way to our customers. With

Maxis on board, we intend to reinforce this even further. Customers will

be able to experience significant improvement in coverage and network

quality in the coming months, and they will also start to understand our

value proposition better, as we step up our brand building efforts. In

addition, they will also be able to experience new advanced services

through our partnership with Maxis.

What is the focus of Aircel's new management?

We are focused at bringing better service and value

to our customers. We will be extending coverage in the areas we are

already in, and also enter new telecom circles in order to provide better

roaming experiences to our customers. Aircel is exploring class B and C

cities, where the cellular mobile penetration is very low, as we have

large scope of growth. Here our strategy would be more centered on

pre-paid subscribers. We are also working to enhance our existing network

and also introduce new services.


our subscribers unique and appealing VAS will make us stand out

We are also focused on developing our Aircel brand to

allow us to better engage our customers. We intend to expand to 12 circles

by the year-end and consolidate our position in the existing circles.

What gives Aircel an edge over competition?

We know that value-added services (VAS) are the order

of the day. Providing our subscribers unique and appealing VAS will make

us stand out. For instance, we recently launched 'Talking SMS' or

voice SMS that has been extremely successful. We also introduced 'SMS

Bank' to enable our subscribers to store SMS on the Web and retrieve

them on their mobiles.

This has been popular with the professionals and the

student community. Recently, we also enhanced our roaming facility by

implementing 'Short Codes' and 'Smart Call Assistant' services

from California-based Roamware, a leader in roaming solutions. This is the

first of its kind roaming service in India. 'Short Codes' lets inbound

roaming subscribers access their local services such as voicemail,

directory service, and customer care besides convenience services such as

taxi, hotels etc. 'Smart Call Assistant' lets them use their

phonebooks as they would at home—-automatically adding missing

international access codes. Increasingly, our customers will be able to

experience more advanced data services. You can expect some more

innovative solutions from Aircel very soon.

Given the strong subscriber growth in the new circles in

the past few months, Maxis plans to invest about Rs 2,140 crore in capital

expenditure this year to support the existing and additional circles targeted.

The capital for these investments will be raised at Aircel's level.