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A Report On IDEA CELLULAR
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Company Profile
About The Aditya Birla Group
The Aditya Birla Group is India's first truly multinational corporation. Global in vision, rooted in values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. A US$ 24 billion conglomerate, with a market capitalisation of US$ 28 billion and in the League of Fortune 500, it is anchored by an extraordinary force of 100,000 employees belonging to over 25 different nationalities. Over 50 per cent of its revenues flow from its operations across the world.
The Group's products and services offer distinctive customer solutions worldwide. Its 85 state-of-the-art manufacturing units and sectoral services span 20 countries — India, Thailand, Laos, Indonesia, Philippines, Egypt, Canada, Australia, China, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Malayasia and Korea.
A premium conglomerate, the Aditya Birla Group is a dominant player in all of the sectors in which it operates. Among these are viscose staple fibre, metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilisers, insulators, financial services, telecom, BPO and IT services.
The Group has been adjudged the best employer in India and among the top 20 in Asia by the Hewitt-Economic Times and Wall Street Journal Study 2007.
Globally the group is :
A metals powerhouse, among the world’s most cost-efficient aluminium and copper producers. Hindalco, from its fold, is a Fortune 500 company. It is also the largest aluminium rolling company and one of the three biggest producers of primary aluminium in Asia, with the largest single location copper smelter
About the company IDEA CELLULAR LTD.
Idea cellular is a wireless telephony company operating in various states in India. It initially started in 1995 as a join venture between the Tatas, Aditya Birla Group and AT&T by merging Tata Cellular and Birla AT&T Communications.
Initially having a very limited footprint in the GSM arena, the acquisition of Escotel in 2004 gave Idea a truly pan-India presence covering Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttar Pradesh (East and West), Haryana, Kerala, Rajasthan and Delhi (inclusive of NCR).
The company has its retail outlets under the "Idea n' U" banner. The company has also been the first to offer flexible tarrif plans for prepaid customers. It also offers GPRS services in urban areas.
Holding
Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This stake was bought by both the Birlas at 16.45% each.
Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-based mobile provider, cropped differences between the Tatas and the Birlas. This dual holding by the Tatas also became a major reason for the delay in Idea being granted a license to operate in Mumbai. This was because as per Department of Telecom (DOT) license norms, one promoter could not have more than 10% stake in two companies operating in the same circle and Tata Indicom was already operating in Mumbai when Idea filed for its license.
Industry Profile
Sector Overview
Although India's tele-density has improved from under 4% in March 2001 to over 15% at the end of September 2006, we are way behind other developing nations. The total annual telecom revenue is estimated to be over Rs 650 bn and the sector can broadly be divided into three segments – basic telephony, cellular telephony and the Internet.
The cellular telephony segment has emerged as the fastest growing segment in the Indian telecom industry. The mobile subscriber base (GSM and CDMA combined) has grown from 1.9 m at the end of FY00 to 130 m at the end of September 2006. A slew of tariff reduction in the past few years has helped the segment to gain in scale. The cellular segment is playing an important role in the industry by making itself available in the rural and semi urban areas where teledensity is the lowest.
As far as the Internet services are concerned, India currently has a subscriber base of 6.9 m users. Of this, around 19% is accounted for by broadband users (>=256 kbps). The ARPU for this segment was Rs 210 at the end of FY06. PSU major, BSNL holds the top spot with a market share of 42%, followed by MTNL with a share of 12%,. This is followed closely by Sify, which ranks third with a market share of 11%.
Bharat Sanchar Nigam Limited (BSNL)
Bharat Sanchar Nigam Limited (known as BSNL) is a public sector communications company in India. It is the largest telecommunication company in India and the sixth largest in the world. Its headquarters are at Statesman House, Barakhamba Road, New Delhi. It has the status of Mini-ratana - a status assigned to reputed Public Sector companies in India.
BSNL is India's oldest and largest Communication Service Provider (CSP). Currently BSNL has a customer base of 64.8 million (Basic & Mobile telephony). It has footprints throughout India except for the metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on March 31, 2007 BSNL commanded a customer base of 33.7 million Wireline, 3.6 million CDMA-WLL and 27.5 million GSM Mobile subscribers.
BSNL's earnings for the Financial Year ending March 31, 2006 stood at INR 401.8b (US$ 9.09 b) with net profit of INR 89.4b (US$ 2.02 billion). Today, BSNL is India's largest Telco and one of the largest Public Sector Undertaking of the country with authorized share capital of US$ 3.95 billion (INR 17,500 Crores) and networth of US$ 14.32 billion.
Bharti Airtel Ltd.
Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management.
Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - mobile services, broadband & telephone services (B&T) & enterprise services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the B&T business offers broadband & telephone services in 94 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand.