Search the Internet          Tips  Sites: Finance, Investment

Batata renamed Idea Cellular

Priya Ganapati in Mumbai

The newly merged cellular entity, Birla Tata and AT&T, has re-launched itself as 'Idea Cellular', a new corporate identity that would be both the name of its consolidated brand and the merged company.

The 'Idea' name will replace the AT&T brand in Maharashtra, Goa and Gujarat, the Tata Cellular brand in Andhra Pradesh and the RPG cellular brand in Madhya Pradesh and Chhattisgarh.

In October 2001, the Birla, Tata and AT&T cellular companies merged together to form a monolithic that now boasts of a subscriber base of over 800,000. The merger which came into effect with January 2002, was the largest in the Indian telephony sector.

"The brand name 'Idea' is easy to remember and will be soon be there on everyone's lips. It's a new name we have thought of in line with the new identity that we have established for ourselves," says Ratan Tata, Chairman of the Tata Group.

The decision to unveil a new brand name and identity has come in time before the launch of cellular services in Delhi by the merged Birla, Tata & AT & T group. The group would cover Delhi, Noida, Gurgaon, Ghaziabad and Faridabad as the fourth cellular operator in that circle.

Delhi boasts of the highest per capita income in India and has the highest penetration of cellular subscribers.

Though the launch has been held up to the lack of allocation of the requisite frequency spectrum, the group hopes to roll out its services in another two to three months.

Idea Cellular is currently present in seven states and accesses over 45 percent of India's total telephony potential. It employs over 1,200 people and has notched a 135 percent increase in subscribers, compared to the 81 percent growth of the industry itself.

India's mobile telephony sector has been rapidly growing in the last few years and has changed from a low-volumes high margin business to high-volumes low margin business. Mobile telephony rates have fallen steeply over the last two years and the price of a cellular call is less than Rs 1.50 per minute.

According to analyst estimates, India will have 100 million cellular phone users by 2010. "In 2010, one in every six Indians between the age 6 and 60 will have a mobile phone. It will soon overtake landline telephony and right now is the fastest growing sector in the country," says Sanjeev Agha, President and CEO, Idea Cellular.

It is also one of the most intensely competitive and demanding sectors. Last year, Idea Cellular invested Rs 5 billion towards building a robust network. It expanded its coverage from 280 to 480 towns and is now focussed on expanding in newer cities.

"It is not a business for the faint-hearted. It requires enormous investments in infrastructure, technology and marketing. There are no quick returns and you have to work hard towards increasing your subscriber base and your reach," says Agha.

Idea Cellular is expected to give the Birla, Tata & AT & T merged venture a pan-Indian corporate identity. Each of the three individual houses roughly holds a third of Idea Cellular's equity.

Though Agha declined to reveal details about the Idea's plans for a public offering, he said that the clean equity pattern would greatly simplify any decision the company chooses to take about its financial path.

ALSO READ:
The Rediff Budget Special
Money
Business News