Back3G is yet to bear fruit, 4G is a far cry in India: Idea’s Himanshu Kapania
Kapania speaks of the need for a M&A policy for the telecom sector
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Mumbai: Himanshu Kapania, managing director, Idea Cellular Ltd, said data will drive growth but the Indian market is not ready for fourth-generation (4G) technology. In an interview on Thursday, Kapania also spoke of the need for a merger and acquisition (M&A) policy for the sector and explained why the company is exploring raising money by selling shares to institutional investors. Edited excerpts:
What are your expectations going into the second half of fiscal year 2014?
We don’t give guidance. Our (voice) minutes have declined on a sequential basis. We do see some decline every year in minutes during the second quarter, which is seasonally weak as we have a higher propensity of rural customers who do not use minutes during the second quarter. The best way to make comparison is on a year-on-year basis. The reason for the 19% jump in revenue is the 8% rate improvement. We have improved realization by 3.3 paisa per minute.
Will data be the key revenue driver?
Idea Cellular believes we have just touched the tip of an iceberg as far as wireless broadband biz is concerned. Data is the way to go ahead in this business in the future, and now contributes 8.1% to overall value-added services versus 5.4% last year.
You plan to raise money by selling shares to institutional investors.
We haven’t decided if we are going to do it. We took shareholder approval for the QIP (qualified institutional placement) on 16 September. We are yet to finalize investment bankers for the deal. We have one-year window period to do capital-rising. The primary reason is to meet the funding when licences come for approval. The idea was to get an enabling resolution ahead of renewal of licenses.
Any plans for 4G services?
It’s premature for the country where even 3G (third generation) has not been successful. So, first and foremost the current users who are very comfortable with their services will have to upgrade their devices. Indian telecom operators do not have funds of any kind to subsidize devices. Prices have to come to a ₹ 3,000-4,000 level. 4G is far into the future.
What are your thoughts on merger and acquisition norms for the telecom sector that are likely to be announced next month?
Idea Cellular is a pan-India operator. We do not need an additional operator’s help to complete our presence. Having said that, what we are looking forward to the spectrum-trading policy, which will help improve overall availability of spectrum. We are also looking at a road map for spectrum, as the government has a large quantum of spectrum in the 700MHz, 1,800MHz and 2,100MHz bands, and this will help improve our quantum of spectrum.
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