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Idea Cellular to achieve financial closure soon

Syed Amin Jafri

Birla Tata AT& T Limited, India's fastest growing cellular company, which has acquired a new corporate avatar "Idea Cellular" is expected to achieve financial closure for the debt component of its proposed Rs 45 billion investment.

Addressing a media conference here, Sanjeev Aga, president and CEO, Idea Cellular, said the company, a joint venture of Aditya Birla group, Tatas and AT&T, would henceforth shed the abbreviated moniker BTAL and be known as Idea Cellular."

He said the company's equity of Rs 22.4 billion is being contributed by the three parent companies in the ratio of one-third by each partner.

The combined debt would be around Rs 22 billion. The company has appointed three advisors-IDBI, Bank of America and Deutsche Bank. The overall project cost is estimated to be Rs 45 billion. In 60 days, the company would achieve financial closure for its debt component.

"Ours is not a listed company yet. We would like to be listed in the Indian bourses in the next 24 months. We will then share our strategy with the Indian investors," he said.

The Idea Cellular currently provides cellular services in Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh and Chhattisgarh. In the fourth round of licensing, the company also bagged Delhi (including national capital region) where it is putting up the country's finest cellular network with ballpark investment of Rs seven billion, including license fees, over the next two to three years.

The company has invested Rs 5 billion in its network in other states during FY 2001-02, to build a formidable position in its markets.

Aga said the seven states where the Idea Cellular is operating combine some of India's most attractive and contiguous markets.

With a footprint dominating the map of India, Idea Cellular accesses over 45 per cent of India's total telephony potential.

During FY 2001-02, Idea Cellular became India's fastest growing cellular operator with a staggering 135 per cent annual growth (against the industry average of 80 per cent), touching a subscriber base of 850,000 at the end of April 2002.

The company offers its services in 480 towns, besides hundreds of villages now. The latest NFO MBL survey has ranked Idea Cellular Number One in customer satisfaction.

Stating that the 21st century would be the century of the wireless, the Idea Cellular CEO said that in just a decade, cellular connections the world over raced to one billion, and cellular users now outnumbered fixed-line users in close to 100 countries.

"India leapfrogged into the wireless age with six million cellular subscribers now and it is perched on the ascendancy of a huge growth curve that is estimated to cross the 100 million subscriber mark by 2010, making cellular telephony among the biggest and fastest growing sectors in the country. Every sixth Indian in the 16 to 60 age-group will have a mobile phone by 2010," he said.

S K Subramaniam, chief operating officer, Idea Cellular, announced that the new brand name "Idea" and "Idea Chitchat" would soon replace the AT&T brand in Maharashtra, Goa and Gujarat, the Tata Cellular brand in Andhra Pradesh and the RPG brand in Madhya Pradesh and Chhattisgarh.

"The new brand will give Idea Cellular a truly pan-Indian presence stretching from the Arabian Sea in the West to the Bay of Bengal in the East, covering all of Central India.

"The icing on the cake for Idea Cellular would be the forthcoming launch of its services in Delhi and the National Capital Region, covering Noida, Ghaziabad, Faridabad and Gurgaon, as the fourth cellular operator.

The metro circle of Delhi boasts the highest per capita income in India, apart from the highest penetration of cellular subscribers. Our operations in Delhi will start in June 2002 but due to the delay in the release of spectrum to us in time, there is a possibility of delay of a few weeks," Aga explained.

Idea Cellular is already the Number One cellular operator in Andhra Pradesh with a subscriber base of 267,000 at present. The company is extending its coverage from the current 92 cities to 120 cities, besides 700 small towns and villages.

With over 240 cell sites spread across the state, the company provides extensive cellular coverage across 1,000 kms of AP's lifeline through Costa corridor, Deccan corridor and Krishna Corridor, Subramaniam pointed out.

Answering a question, Aga said that the company had announced an initial agreement for merger of BPL-Cellular. "Our intention is to merge but I cannot say more on the matter," he pointed out.

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