The Genesis of Idea Cellular

Idea Cellular has applied to the Department of Telecommunications for unified licenses in 12 circles. At present the company operates in 8 circles and is about to commence operations in 3 more circles. All this put together, the telco would operate in 23 circles and will have an all India presence, something only Bharti and Reliance can lay claim to.

Idea, originally Birla AT&T was a joint venture of the Aditya Birla Group and AT&T. Subsequently when the Tata Group merged with this company, Birla-Tata-AT&T was formed. A telecom behemoth would have been created, had the much talked about merger between Birla-Tata-AT&T and BPL Communications taken place. Idea thus lost the first chance to join the big league. Then, in 2005, Cingular acquired AT&T globally and sold its stake in Idea to the Indian promoters, who then embarked on a battle for control and lost out on the tremendous growth the mobile industry has been witnessing.

According to market reports, the telecom services market in India was Rs 87,962 crore in 2005-06, up from Rs 67,523 crore in 2004-05, a growth of 30%. Idea is planning to make it big now and it could not have chosen a better time given the fact that the mobile subscriber base doubles every 12 months.

The Aditya Birla Group acquired the Tata Group’s 48.14% stake in Idea for Rs 4406 crore and currently owns a 98 percent stake in Idea. Ideas revenues for the entire 2004-05 were Rs. 2409 crore. For the first 9 months of 2005-06 the figure stood at Rs. 2413.8 crore.

With Idea coming under the dynamic leadership of the Aditya Birla Group, it has applied for new licenses and proposes to foray into national long distance telephony (NLD). All this is set to change the telecom scenario much the same way an Idea can change your life.