It was the year of 'innovation' for Idea Cellular. The
company launched a slew of innovative products, which not only helped Idea gain
a foothold in all the eight circles it operates in but also get better ARPU
levels.
The company generated revenue of Rs 2,966 crore, up 31%
from the previous year. The net
profit was Rs 220 crore. Though the tariffs fell 20%, Idea managed to maintain
its margins. The company's subscriber base increased from 5 mn in FY 2004-05
to 7.4 mn in FY 2005-06.
IDEA
Area of operation:Cellular
Services
Address: Idea Cellular, 11/1, Sharada Centre, Off. Karve Road, Pune
- 411004, Maharashtra
Phone: +91-20-56412222
Fax: +91-20-9850003498
Website:www.ideacellular.com |
For the first time in the country, Idea came out with
pre-paid royalty program, wherein subscribers have been offered extra talktime,
provided they stay connected with the company for three months. It also launched
'Pay Easy' facility for its subscribers, so that they can make payments to
any Idea retailer across the country. To counter the Blackberry, Idea came up
with its own e-mail solution 'Idea mail' that didn't require any e-mail
enabled handset.
The company also gave the flexibility to its pre-paid
customers to choose between fixed monthly rental, talk time and validity. This
scheme helped increase ARPU levels of the company. The average ARPU of the
company was Rs 400 last year.
The tie-up with HDFC to launch co-branded card helped both
the companies acquire more customers. It helped Idea customers avail discounts
in home loans from HDFC and similarly HDFC customers got incentives on Idea's
post-paid connections. When other operators were busy announcingÂ
'lifetime' schemes, Idea came out with 'two-minutes' of free
outgoing.
HIGHLIGHTS
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The company won applaudes at the international level also.
Its 'Bill Flash' product bagged an award at the 3GSM conference held in
Barcelona recently.
Idea continued with its network expansion last year. It
invested around Rs 1,200 crore in network expansion in 1,944 towns and 19,500 km
of highways. It is now planning to add three more circles to its kitty-UP
(East), Rajasthan and Himachal Pradesh. The network has already been rolled out
in these states and commercial launch is expected by October this year. It has
planned a capex of Rs 2,800 crore this year, of which Rs 600 crore would be
spent in the new circles.
'Idea will be
differentiated by service delivery' Despite a dip in
tariff and ARPU, how did Idea manage to maintain its margins?
We took number of steps to achieve that. Our in-house expertise to
develop products and make them user friendly helped reduce cost. We
don't believe in outsourcing and hence, did everything on our own, right
from network management to customer care. Today, network maintenance is an
uphill task for operators. We started sharing network with other
operators. We almost do 48% of network sharing with operators except
Reliance. These small steps that we took last year, translated into
massive cost savings. CEO
Vikram Mehmi | /vnd/media/post_attachments/0d97ec68671526460f50a781e86eb66d2ff4a98fe539df6cb13d911bfea3b7ac.jpg) |
What steps have you
taken on the customer care front?
Customer care is an important component of our overall growth plan. We
have centralized customer care center in Mumbai and Pune. We have
recently, pumped-in lot of money in the upgradation of these call centers.
These are now state-of-the-art customer care centers in Asia. Our priority
is to have quick turn around time for customer queries. That's the
reason we have consolidated our northern region customer care in Delhi and
the rest is being handled by our Pune center. Now that we are adding more
circles to our kitty, the focus would be more on enhancing the capacity of
these centers. What is your
distribution strategy?
The service delivery mechanism has always been a part of our strategy.
Idea services will be differentiated by service delivery and we want to
become a benchmark for other service providers, as far as service delivery
is concerned. We will have a distribution network lead in all the circles
we are operating in and we will maintain this lead. We have around 1.3
lakh retailers, 70 company owned showrooms, and 500 franchisee showrooms
in all these circles. We are actually redrawing our showroom strategy and
new showrooms will have uniform look and experience of our products, which
will eventually benefit customers. Though you don't
have national presence yet, you have been very aggressive on branding. Has
it helped in customer acquisition?
We are present in eight circles and we will soon start our commercial
operations in another three circles. Besides this, we have already filed
the application to start operations in Mumbai and Bihar. So within few
years we will have a national presence. We have invested a lot in
branding. We don't have any brand ambassador because we don't believe
in it. In India only two things sell-bollywood and cricket. We have
sponsored film shows and had bid for sponsorship of the cricket team. We
believe in local branding. That's the reason Idea is more visible in
hoardings and other stuff. After being taken
over by the Birlas, what difference do you see in the approach as far as
telecom business is concerned?
Idea is a part of the growth strategy of the Birla group. Now there is
no uncertainty and the new management is very keen to see this business
grow. Our credit worthiness and image will significantly improve in the
market. We will leverage on synergies within the group and the company
will leapfrog in the coming years. |
Idea also embarked on an aggressive branding campaign
wherein it sponsored international events like IIFA awards and has the rights
for organizing it for three years. It also organized events such as Sonu
Nigam's live shows in 22 cities across the country. It had also bid for
sponsorship of Indian cricket team with Rs 275 crore and was at the second
position when Sahara bagged the rights for Rs 325 crore. The company will
continue its focus on entertainment industry, as it believes that entertainment
is the core for any value-added services in India.
Idea is not gung ho about 3G and would like to wait and
watch its rollout in the country. The company prefers HSDPA to 3G, as it
believes that the rollout of HSDPA would benefit customers in the long run.
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