New Delhi: Malaysia’s Maxis Communications Bhd is investing $10 billion in its Indian unit Aircel to accelerate its expansion in the world’s fastest-growing mobile market, and is interested in bidding for 3G spectrum.
Half of that has already been spent expanding Aircel’s network, Maxis chief executive Sandip Das said at the launch of services in the lucrative Delhi zone on Wednesday, adding he hoped to nearly double the number of subscribers this year.
Aircel, 74% owned by Maxis, now operates in 13 of India’s 22 service areas. With licences already in place, coverage will be expanded to another 5 zones in the next six weeks and to all of India within two years, Das said.
“The base is still small compared to all the big boys. But we have, as I speak to you, have over 17 million subscribers. Hopefully by the end of this year we will be 30 million ourselves,” he said.
India is the world’s second-largest wireless market after China with 362 million mobile users at the end of January, Competition is intense, particularly in affluent urban centres, pushing down tariffs and hitting margins of telecoms firms.
Aircel is the seventh mobile operator in the Delhi area, which offers high-paying consumers but already has a mobile penetration level in excess of 100%.
Analysts say India’s plans to allow number portability later this year, where users switch operators but keep their number, should help new entrants lure subscribers from incumbent firms.
“Number portability is a great way to establish that the consumers get a right value,” Das said. “For a new operator like us it’s an opportunity.”
Das said Aircel had an appetite for bidding at an auction of third-generation spectrum, but would not get carried away. An original reserve price of Rs20.20 billion ($390 million) is being reviewed by a ministerial panel and might be increased.
“I do hope the bidding will be rational,” Das said.
A listing of Aircel is also in the company’s “scheme of things”, he said, but may not happen until markets recover.
Maxis bought its stake in Aircel in 2005, buying the maximum stake a foreign investor can hold in an Indian telecom firm. As part of the deal that saw it take control, India’s Apollo Hospitals Enterprises Ltd bought the other 26%.