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‘Building strengths into the future’

‘Building strengths into the future’
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First Published: Tue, Oct 21 2008. 01 02 AM IST

Future plans: Managing director of Idea Cellular Ltd Sanjeev Aga. Scott Eells / Bloomberg News
Future plans: Managing director of Idea Cellular Ltd Sanjeev Aga. Scott Eells / Bloomberg News
Updated: Tue, Oct 21 2008. 01 02 AM IST
Mumbai: Idea Cellular’s managing director Sanjeev Aga on his company’s second quarter results:
Do the Idea Cellular results also include the numbers of Spice?
No. This is stand-alone.
If your results had included Spice, how would they look?
The Spice board meeting is after two days. So I can’t even comment on that.
Your net profits have almost halved. Why is that? Is it because of the investments you are making in new infrastructure and enrolling new subscribers?
We are in a phase of strengthening our company.
So we are adding capacities and we are adding circles.
Future plans: Managing director of Idea Cellular Ltd Sanjeev Aga. Scott Eells / Bloomberg News
We are also spending more on advertising. So, there is a difference between sweating existing assets and going for growth. So, we are building strengths into the future. So, it is anticipated. Now, next month we will launch services in Bihar, so obviously we will feel the strain.
But all this will strengthen the company in the long run.
Analysts expected average revenues per user (Arpu) to come down. But Arpu posted by Idea is below analysts’ expectations (analysts expected Arpu to drop by 3.4% but it dropped 5.9%) too.
It is difficult to say (why). This is a bad season also. July, August, September are normally lean season.
We cannot say (things are down) with one quarter; it can bounce back afterwards.
How is your Mumbai circle doing?
It is doing satisfactorily. Doing well.
When you started, you mentioned that you will have 20% incremental growth in Mumbai. Have you progressed in subscriber additions to reach that target?
We would have that incremental growth. One-and-a-half month is nothing, but we will have that. One month is neither here nor there, but we are on our way. We will do it without any problem.
Where will the numbers come from? Mumbai is a highly saturated market and is among the highly penetrated telecom circles in the country.
Penetration keeps going up. It is not static and people for whatever reason keep changing their service provider.
There is some issue on the licence fees for two circles in Karnataka and Punjab. Idea wants to surrender these after acquiring Spice but some reports suggest the government will not refund the licence fees.
At this point of time, I’ll speak only on the results.
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First Published: Tue, Oct 21 2008. 01 02 AM IST