Mumbai: Idea Cellular, India’s fifth-largest mobile operator, on Wednesday launched services in Mumbai, with aims of getting 20% of the city’s new users over the next year and breaking even in the zone in four years.
India’s financial capital has been a lucrative zone for telecom firms, but with more than 80 percent of the city’s population owning mobile phones, compared with an all-India average of just 26%, the pace of addition has slowed down.
Mobile subscriber numbers in the Mumbai service area rose by about four million in the year ending June to 14.5 million, with the population of the telecom zone estimated at about 17 million.
In Mumbai, Vodafone Essar, India’s No. 3 mobile firm, had a market-leading 3.7 million users as of end-June, followed by Reliance Communications, the second-largest operator nationally, with just over 3 million.
Managing director Sanjeev Aga said Idea would spend Rs8 billion on its Mumbai expansion in the financial year ending April 2009.
Shares in Idea Cellular were up 3.7% at Rs84.90 at 0856 GMT in a Mumbai market that was up 1.2%.
Idea already provides mobile services in 11 of India’s 22 telecoms service areas and has licences for the others. It had 28.2 million subscribers as of end-July.
Nationally, Idea lags Bharti Airtel, Reliance Communications, Vodafone-controlled Vodafone Essar and state-run Bharat Sanchar Nigam Ltd in number of subscribers.
The company has agreed to buy smaller operator Spice Communications, which operates in Punjab and Karnataka service areas. Malaysia’s TM International will take a stake of about 20% in Idea as part of the deal.