Market Analysis of Telecom Industry

1. Industry Analysis
Telecom Industry
Ravindra
KRUPANIDHI BUSINESS SCHOOL
Industry Analysis
of
Telecom Industry
Prepared By: -
Ravindra Singh Gohil
3rd
Semester MBA
KRUPANIDHI BUSINESS SCHOOL
1
Industry Analysis
Telecom Industry

2. 2
Ch. Topic Page
No.
1 Introduction of Telecom Industry
A. Introduction 3
B. General Introduction about Sector 4
C. Major Players 5
D. Market Share of Telecom Company in India 5
E. High Growth Rate in Resent Year 6
F. Problem of Telecom Industry 7
G. Future of Telecom Industry 7
H. 3G Technology in India 8
i. 3G Technology 9
ii. Existence of 3G Technology 9
iii. 3G Technology & Human Resources 10
iv. Mobile Interview 10
v. Conferences 10
vi. File Transfer 11
vii. E-Learning & M-Learning 11
2. Bharti Airtel 12
A. Profile of the Company 13
B. Vision & Promise 14
C. Corporate Responsibility 14
D. Subcriber Base 15
E. Award and Recognition 17
F. Balance Sheet 19
G. P&L Account 20
3. Idea Cellular 21
A. Origin of Origination 22
B. Brand Values 22
C. Brand Vision 22
D. Brand Mission 23
i. The India Footprint Idea 23
ii. The Technology Advantage Idea 23
iii. The customer Focus Idea 23
iv. The Employee Focus Idea 23
E. Current Growth & Development 23
F. Future of Origination 24
G. Award and Achievement 25
H. Business Focus 25
I. Product and Service 26
J. Company Strategy 27
K. Subscriber Base 28
L. Balance Sheet 29
M. P&L Account 30
4. Comparison 31
A. Number of Subscriber 31
B. Sales 32
C. Profit 33

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Telecom Industry
A. INTRODUCTION
This first chapter presents our introduction to the birth and growth of Indian
Telecomm Industry, and the major player of Telecomm. The background will, presents
current status of Telecomm Industry, problem associated with it and lastly the future of
Telecomm Industry.
B. General introduction about the sector.
The telecom network in India is the fifth largest network in the world meeting up
with global standards. Presently, the Indian telecom industry is currently slated to an
estimated contribution of nearly 1% to India’s GDP.
The Indian Telecommunications network with 110.01 million connections
is the fifth largest in the world and the second largest among the emerging economies
of Asia.Today, it is the fastest growing market in the world and represents unique
opportunities for U.S.companies in the stagnant global scenario. The total subscriber
base, which has grown by 40% in 2005, is expected to reach 250 million in 2007.
According to Broadband Policy 2004, Government of India aims at 9 million broadband
connections and 18 million internet connections by 2007. The wireless subscriber base
has jumped from 33.69 million in 2004 to 62.57 million in FY 2004-2005. In the last 3

4. 4
years, two out of every three new telephone subscribers were wireless subscribers.
Consequently, wireless now accounts for 54.6% of the total telephone subscriber base,
as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5
million new subscribers per month by 2007. The wireless technologies currently in use
are Global System for Mobile Communications (GSM) and Code Division Multiple
Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile
services in 19 telecom circles and 4 metro cities,covering 2000 towns across the
country.
C. Major Players
There are three types of players in telecom services:
• State owned companies (BSNL and MTNL)
• Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)
• Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel,
Idea Cellular,BPL Mobile, Spice Communications, TATA Docomo)
D. Market Share of the Telecom Company in India
Current status of Telecomm Industry

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Telecommunications is one of the prime support services
needed for rapid growth and modernization of various sectors
of the economy. It has become especially important in recent
years because of enormous growth of Information Technology (IT)
and its significant impact on the rest of the economy. India is perceived
to have a special comparative advantage in IT and in IT-enabled services. However,
sustaining this advantage depends critically on high quality telecommunication
infrastructure. Keeping this in view, the focus of policy is vision of world class
telecommunication facilities at reasonable rates. Provision of telecom services in rural
areas would be another thrust area to attain the goal of accelerated economic
development and social change. Although the telecom network has grown rapidly in
recent years, its growth needs to be accelerated further in the Tenth Plan.
The telecom sector in India has been witnessing a continuous process of reforms
since 1991. With the opening of international long distance services and internet
telephony from April, 2002, the process of liberalization and opening up the sector for
competition is complete. Convergence of services is a major new emerging area and
the telecom sector will have to address this in the Tenth Plan
E. High Growth in Recent Years
During 1997-2002 period, a record growth rate of telecom services was achieved
in the country. The network (equipped capacity) grew at an average rate of about 22 per
cent. Growth of both cellular mobile phones and fixed line phones has been equally
impressive. While private sector concentrated in cellular mobile phones segment, the
growth in the Government sector was primarily due to fixed line connections. Against
the target of providing 237 lakh Direct Exchange Lines (DELs), about 240.55 lakh
additional DELs have been provided during the Ninth Plan. The cellular network has
grown from a small base of 3.40 lakh connections to 64.31 lakh connections by the Plan

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end. As a result of this growth, the tele-density has nearly tripled from 1.57 at the
beginning of the Ninth Plan to 4.4 as on March 31, 2002.
F. Problem of Telecomm Industry
The need to integrate ETL (Extract, Transform and Load), EAI (Enterprise
Application Integration), DW, enterprise portals and BI is especially true for the much
battered telecommunications industry. Whatever the political or business reasons, the
fates have not been kind to telecom over the past several years. In order to turn their
fortunes, many telecom companies are investing heavily in new technologies that will
enable them to collect and make sense of the overabundance of data that resides in
their organizations, thus turning that data into usable information.
There's a wrench in the works, however. Over the past decade or so, countless
vendors have touted their products as all- inclusive or comprehensive solutions to
DW/BI problems. As a result, many organizations have sunk copious amounts of money
into these panacea solutions. They have built specialized data warehouses, operational
data stores, data marts and business intelligence applications on top of these data
stores or legacy systems. I call it data mart anarchy.
G. Future of Telecomm Industry
By 2012, half of the 20 largest carriers will establish new
lines of business outside telecom, such as media
entertainment, advertising and managed services, and so
more.Traditional telecom carriers can no longer rely on

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conventional competitive tactics such as price cuts,
promotions and basic product bundling to maintain their
edge in the consumer segment, warned Gartner. The research firm also said that non-
traditional telecom players like Apple, Google and Nokia, which have a strong
understanding of consumers, are adopting new business models that are forcing
carriers to reassess their approach and service delivery. Faced with this competition,
traditional telecom carriers will attempt to transform themselves by primarily exploiting
content.
“The players that will be amongst the successful 20 per cent will be the ones that
provide a consumer-centric experience, for example, through interactive TV, where
users will be able to chat online while watching their favourite TV programmes,".
The telecom industry in 2012 will be very different from the one we know today.
Developing strong partnership skills, focussing on customer user groups, embracing
Internet services and starting to talk the language of Web 2.0 will enable the carriers to
thrive well into the future.
H. 3G Technology In India
From the time of telegraphs Indian telecom sector has witnessed an immense
growth and has diversified into various segments like, Fixed Line Telephony, mobile
telephony, GSM, CDMA, WLL etc. The telecom industry is growing at a fast pace
introducing newer technologies. Even the network operators and handset providers are
also coming up with newer value added services and advanced technology cell phones
with multimedia applications.
Now it's time to welcome the much-awaited 3G Technology. Bharat Sanchar
Nigam Limited is all set to launch the technology by December 2007. Not only the
network providers but also the handset providers in India are waiting eagerly for the
launch of 3G to earn very high revenues from the value added services provided by the
technology.

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The technology is initially being launched on CDMA platform. The technology is
being tested over various platforms and cellular networks.
i. 3G TECHNOLOGY
3G or Third Generation technology is a convergence of various Second
Generation telecommunication systems. The technology is intended for
SMARTPHONES - multimedia cell phones. Video broadcasting and other e-commerce
services such as, stock transactions and e-learning will now be made possible much
faster. It offers 3 Mbps speed for downloading, which is very high as compared to that of
the 2G technology. The 3G technology provides for internet surfing, downloading, e-mail
attachment downloading, audio-video conferencing, fax services and many other
broadband applications.
ii. EXISTENCE OF 3G TECHNOLOGY
3G Technology was implemented in Japan for the first time in the world. Today
the technology is serving 25 countries over more than 60 networks having its existence
in Asia, Europe and USA. Video conferencing has been a major factor in the success of
the technology.
CDMA2000 3G Subscribers Base Worldwide

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3G Subscribers Base (in millions)
iii. 3G TECHNOLOGY & HUMAN RESOURCES
Not only the media and entertainment but the business sector too has started
utilizing the 3G applications worldwide. Video conferencing allows two individuals at a
distance to interact in the same way as they could have done in person. The technology
is being implemented at various functional level of the business such as, marketing,
human resources, etc.
iv. Mobile Interview
In today's global scenario, the 3G technology will enable organizations and
qualified candidates to have a telephonic interview in a modern way through video

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conferencing. Traditional telephonic interview and personal interviews may be replaced
by 3G voice and video conferencing. This will reduce the cost and save the time of both
the organizations and the candidates.
v. Conferences
3G technology provides for video conferencing which can help the Human
Resource Department interact with their seniors at the time of urgency without wasting
other resources. This can be very much helpful when the concerned person is out of
state or country.
vi. File Transfer
With the advent of video and audio multimedia and a faster rate of downloading
e-mail attachments, employees in an organization can request any urgent file or report
they need to present to the clients. This will again reduce the burden on organization's
resources and increase employee effectiveness.
vii. e-learning & m-learning
3G technology provides for internet browsing that will help the employees to surf
and learn using their 3G cell phones while traveling (m-learning) or from home. The
organizations can schedule training modules for the employees of other branches
through video conferences

11. Bharti AirtelBharti Airtel
Founder And Chairman
Sunil Bharti MIttal
11
Bharti Airtel.

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A. Profile of the Company
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, Airtel Telemedia Services & Enterprise
Services. The mobile business provides mobile & fixed wireless services using GSM
technology across 23 telecom circles while the Airtel Telemedia Services business
offers broadband & telephone services in 95 cities and has recently launched India's
best Direct-to-Home (DTH) service, Airtel digital TV. 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.

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B. Vision & promise
By 2010 Airtel will be the most admired brand in India:
Loved by more customers
Targeted by top talent
Benchmarked by more businesses
We at Airtel always think in fresh and innovative ways about the needs of our
customers and how we want them to feel. We deliver what we promise and go
out of our way to delight the customer with a little bit more
C. Corporate Responsibility at Bharti Airtel
At Bharti, CSR is a way of life. Each department and employee strives to be
sensitive to the stakeholders and environment within their work context. Bharti
encourages employees to take decisions and design business-linked processes that are
sensitive to communities and environment.
Corporate Social Responsibility (CSR) in Bharti encompasses much more than
only social outreach programs. It is an integral part of the way Bharti conducts its
business. The essence of Bharti’s commitment to Corporate Social Responsibility is
embedded in the ‘Corporate Values’, which stem from its deepest held beliefs. These
Values are:
Ø To be responsive to the needs of our customers
Ø To trust and respect our employees
Ø To continuously improve our services – innovatively and expeditiously
Ø To be transparent and sensitive in our dealings with all stakeholders
We encourage our employees to take decisions and design business processes,
keeping in mind the following:
Ø Ethics, fairness and being correct
Ø Meeting and going beyond compliances and legal requirements
Ø Showing respect and sensitivity towards stakeholders and communities, and
Ø Nurturing the environment
We practice our CSR beliefs and commitments through a three-pronged approach:

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Ø Engaging with stakeholders
Ø Ensuring stakeholder sensitive policies and practices
Ø Undertaking programs for our employees, community and environment
Bharti Airtel sensitizes its employees towards CSR issues at various forums. We
feel that it is important that each employee should understand the importance of
environmental, social and economical aspects while taking business decisions. At
Bharti, each employee is sensitized towards CSR issues and thus operations at the
ground level are influenced. Such sensitization exercises have resulted in many
socially and environmentally sensitive decisions on the ground. For example,
Confidence Plan for hearing impaired people, covers noise-making DG sets at extra
cost, investing in consumer awareness campaigns to ensure safe use of mobile are
some examples of the above.
D. Subscriber base
The Airtel subscriber base according to TRAI - Telecom Regulatory Authority of
India as of February 2009[10] was:
* Chennai - 2,133,677
* Delhi - 4,671,177
* Mumbai - 2,791,963
* Kolkata - 2,456,896
* Madhya Pradesh - 7,690,609
* Gujarat - 3,981,660
* Andhra Pradesh - 8,892,353
* Karnataka - 9,820,812

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* Tamil Nadu - 6,003,040
* Kerala - 2,169,633
* Punjab - 3,754,405
* Maharashtra - 6,248,906
* Uttar Pradesh (West) - 2,256,862 & (East) - 5,722,386
* Rajasthan - 6,704,274
* West Bengal & Andaman and Nicobar - 3,501,560
* Himachal Pradesh - 951,121
* Bihar - 7,152,245
* Orissa - 2,811,453
* Assam - 1,448,389 & Other North Eastern States - 890,054
* Jammu & Kashmir - 1,590,935
The total is 101,114,971 or 24.2% of the total 375,742,592 GSM + CDMA mobile
connections in India till February 2009; and presently the Number 1 operator in India. In
2009 Airtel also launched in Sri Lanka.
On the 9th of May,2009 Airtel signed a major deal with Manchester United
Football Club. As a result of the deal, Airtel gets the rights to broadcast the matches
played by the team to its customers.

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E. Awards and Recognitions
For the Year 2008 - 2009
Ø ‘Appreciation Award’ for significant contribution towards Service tax (2008)
– Department of Customs and Central Excise (Delhi Range), Govt of India
Ø “Best Mobile Music, TV or Video Service” category for its Music-On-
Demand service - GSMA Asia Mobile Awards 2008
Ø Buzziest Brands of the Year 2009 - afaqs “World’s 25 Most valuable
Telecom Brands” - Brand Finance Plc 2008
Ø Ranked 3rd among India’s 500 most valuable companies – Business
Today 2008 Ranked 8th among Top 50 most valuable (company) brands,
2008- Brand Finance Plc
Ø Ranked 2nd among Top 500 profit earners- Business Today 2008. Best
Practice Award in Business Process Improvement category – Technology
Managers Forum, 2008
Ø Among ‘India’s Best Marketers’- Business Today 2008 ‘Ranked
among 50 largest and most liquid companies in BRIC countries”- Dow
Jones BRIC 50 2008
Ø “50 Best listed companies in Asia Pacific’- Forbes 2008 ‘Wireless
Service Provider of the Year’ - Frost & Sullivan Asia Pacific ICT Awards
2008
Ø ‘Best Cellular Service Provider’ and ‘Best Broadband Service Provider’ -
2008 V&D 100 Awards Market Leadership awards in ‘Large Enterprise
Telecom Services’, ‘Wholesale Data Services’ and ‘Mobile Services’
categories - Frost & Sullivan ICT Awards 2008
Ø “Ranked 21 among Best performing IT companies in the world” - 2008
BusinessWeek IT 100 “Best ISP in the Broadband Survey” - PC
World,2008
Ø “Best Billing/Customer Care Solution” – GSM Mobile World Congress,
2008 “Most Admired Organization”, “Best National Mobile Operator”,

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“Best Internet and Broadband Operator”, “Best Ad Campaign” – Telecom
Operator Awards, 2008
Ø Platinum Trusted Brand Award 2008 in the Mobile Service provider
category - Reader’s Digest Asia Trusted Brands Survey. IT User
Award 2008 in the Telecom vertical- Nasscom-CNBC TV 18
Ø Airtel is now a fully ISO 27001:2005 Certified Organization-certified by
BSI: British Standards Institute Airtel conferred with "Retailer of the
Year -Telecom Services" Award at the Asia Retail Congress 2009
Ø Sunil Bharti Mittal conferred the U.S.-India Business Council (USIBC)
‘Global Vision’ Award for 2008
Ø Sunil Bharti Mittal became the first Indian to join the Telecom Board of the
International Telecommunication Union (ITU)
Ø Sunil Bharti Mittal recognized as the “Telecom Person of the Year” by
Tele.net Telecom Operator Awards, 2008
Ø Sunil Bharti Mittal joined the Board of Trustees of the Carnegie
Endowment for International Peace

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F. Balance Sheet
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sources of funds
Owner's fund
Equity share capital 1,898.24 1,897.91 1,895.93 1,893.88 1,853.37
Share application money 116.22 57.63 30.00 12.13 2.72
Preference share capital - - - - -
Reserves & surplus 25,627.38 18,283.82 9,515.21 5,437.42 2,675.38
Loan funds
Secured loans 51.73 52.42 266.45 2,863.37 3,959.88
Unsecured loans 7,661.92 6,517.92 5,044.36 1,932.92 1,034.41
Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76
Uses of funds
Fixed assets
Gross block 37,266.70 28,115.65 26,509.93 17,951.74 13,240.63
Less : revaluation reserve 2.13 2.13 2.13 2.13 2.13
Less : accumulated depreciation 12,253.34 9,085.00 7,204.30 4,944.86 3,475.64
Net block 25,011.23 19,028.52 19,303.51 13,004.75 9,762.86
Capital work-in-progress 2,566.67 2,751.08 2,375.82 2,341.25 994.46
Investments 11,777.76 10,952.85 705.82 719.70 931.90
Net current assets
Current assets, loans & advances 10,466.63 8,439.38 5,406.81 3,338.88 2,486.31
Less : current liabilities & provisions 14,466.89 14,362.33 11,042.67 7,272.80 4,708.12
Total net current assets -4,000.26 -5,922.95 -5,635.86 -3,933.92 -2,221.80
Miscellaneous expenses not written 0.09 0.20 2.66 7.94 58.35
Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76
Notes:
Book value of unquoted investments 9,898.56 9,379.62 580.43 476.52 460.83
Market value of quoted investments 1,887.76 1,574.29 125.85 243.99 472.71
Contingent liabilities 4,104.25 7,140.59 7,615.04 4,740.34 3,017.26
Number of equity sharesoutstanding
(Lacs)
18982.40 18979.07 18959.34 18938.79 18533.67

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G. Profit loss account
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Income
Operating income 34,048.32 25,761.11 17,851.61 11,259.12 8,142.44
Expenses
Material consumed 12.41 33.85 22.08 67.40 72.10
Manufacturing expenses 8,627.13 7,339.01 5,017.27 3,299.73 2,365.51
Personnel expenses 1,397.54 1,297.88 1,076.95 734.20 475.86
Selling expenses 2,210.43 1,842.51 1,126.34 804.15 828.20
Adminstrative expenses 8,608.03 4,588.53 3,351.31 2,315.91 1,403.09
Expenses capitalised - - - - -
Cost of sales 20,855.54 15,101.78 10,593.96 7,221.40 5,144.77
Operating profit 13,192.78 10,659.34 7,257.65 4,037.72 2,997.67
Other recurring income 235.99 266.91 101.70 40.75 18.93
Adjusted PBDIT 13,428.77 10,926.24 7,359.35 4,078.47 3,016.61
Financial expenses 434.16 393.43 282.07 236.81 317.00
Depreciation 3,206.28 3,166.58 2,353.30 1,432.34 1,019.36
Other write offs 178.82 266.07 137.80 127.39 161.34
Adjusted PBT 9,609.50 7,100.16 4,586.17 2,281.93 1,518.90
Tax charges 321.78 632.43 566.79 273.68 353.60
Adjusted PAT 9,287.72 6,467.73 4,019.39 2,008.25 1,165.30
Non recurring items -1,497.74 -162.87 3.92 -13.81 -1,726.88
Other non cash adjustments -46.15 -60.67 9.92 17.64 22.23
Reported net profit 7,743.84 6,244.19 4,033.23 2,012.08 -539.35
Earnigs before appropriation 19,541.05 11,778.12 5,489.61 1,225.65 -538.55
Equity dividend 379.65 - - - -
Preference dividend - - - - -
Dividend tax 64.52 - - - -
Retained earnings 19,096.89 11,778.12 5,489.61 1,225.65 -538.55

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IDEA CELLULAR
Chairman
Kumar Mangalam Birla

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A. .Origin of the Organization
Idea Cellular has come a long way since it business origins in 1995 when it was
incorporated as Birla Communications. From a single promoter owned company it
struck joint venture and acquisition deals and even merged with other telcos to bring on
board other partners and then eventually became a Birla Group company again in 2006.
However, the journey included a number of twists and turns among those a particularly
acrimonious split with another business group the Tatas who tended to put their eggs in
two different baskets with their independent launch of CDMA-based telecom services.
IDEA Cellular is a publicly listed company, having listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE) in March 2007. IDEA Cellular
is a leading GSM mobile service operator with pan India licenses. With a customer base
of over 43 million as on end March ’09, in 16 service areas, operations are soon
expected to start in Tamil Nadu including Chennai; Kolkata & West Bengal, North East
& Assam, and J&K.
B. Brand Values:-
Innovate. Stimulate. Liberate……
It is these brand values, which have made us a formidable player in the telecom
industry. Innovations that stimulate the customer and liberate him from the shackles of
time and space are the core of our brand. This is what we strive for. Nothing more,
nothing less, nothing else.
C. Brand Vision:-
It goes without saying that the brand vision of idea mirrors the company’s vision. The
brand mission statement is...... To be the most customer-focused mobile service brand,

22. continuously innovating to help liberate our customers from the shackles of time &
space.
i. The India footprint Idea
Anywhere connectivity
ii. The Technology Advantage Idea
Tomorrow's technology to enrich today.
iii. The Customer Focus Idea
Make a single inter
iv. The Employee Focu
Nurture the roots that nurture our ideas.
E. Current Growth & Development
08-DEC-08
The company has announced that WPC Wing of the Department of
Telecommunications (DoT) has on Dec. 5, 2008 allotted 4.4 MHz Spectrum in 1800
MHz band in respect of Kolkata Metro service area.
19-NOV-08
The company has tied up with Taiwan
models in India targeted at the premium segment.
continuously innovating to help liberate our customers from the shackles of time &
D. Brand Mission:-
The India footprint Idea
Anywhere connectivity - bringing India closer.
The Technology Advantage Idea
Tomorrow's technology to enrich today.
The Customer Focus Idea
Make a single interaction a lasting relationship.
The Employee Focus Idea
Nurture the roots that nurture our ideas.
Current Growth & Development
The company has announced that WPC Wing of the Department of
Telecommunications (DoT) has on Dec. 5, 2008 allotted 4.4 MHz Spectrum in 1800
MHz band in respect of Kolkata Metro service area.
The company has tied up with Taiwan-based HTC Corp to offer two touch phone
models in India targeted at the premium segment.
22
continuously innovating to help liberate our customers from the shackles of time &
The company has announced that WPC Wing of the Department of
Telecommunications (DoT) has on Dec. 5, 2008 allotted 4.4 MHz Spectrum in 1800
o offer two touch phone

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30-SEP-08
The company has an Aditya Birla group company, on Tuesday, September 30, formally
launched its GSM service in the states of Bihar and Jharkhand, reports DNA.
30-JUL-08
Lazard India (P) on behalf of the company made an open offer to acquire 20% in Spice
Communications at Rs 77.30 a share.
09-JUL-08
The company has acquired 2 million equity shares of Spice Communications on July 07,
2008 at an average market price of Rs 74.81 a share through open market.
22-APR-08
The Department of Telecommunications (DoT) on Apr. 22, 2008 allotted 4.4 MHz
spectrum in 1800 MHz band in respect of Tamil Nadu Service Area including Chennai to
Idea Cellular
24-JUL-07
On July 24, 2007, the board approved the formation of a wholly-owned subsidiary for
possible transfer of passive infrastructure.
F. Future Of Organisation
Idea plans to have around 160 cell sites in the Himachal Pradesh Circle, 885 cell
sites in the Rajasthan Circle, and 1,137 cell sites in the Uttar Pradesh (East) Circle .
Idea Cellular plans to merge its eight subsidiaries with itself. The merger will help
the company in improving its financial performance as well as rationalize the corporate
structure.

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Network Cost to increase due to coverage expansion At the
end of Q1FY09, idea was present in 90,204 towns and villages as compared to 4`,520
towns and village a year ago. The company’s network cost has increase to 17.3% of
revenues as against 16.5% in Q4FY08.We expect network and licence costs to move
up as the company rolls out services in new circles (Bihar,Mumbai and Tamilnadu).
G. Awards and Achievement
Ø Buzziest Brands in India 2009
Idea voted 4th Buzziest Brand in India by afaqs
Ø Golden Peacock Award 2008
Most Innovative Product & Services
Ø Asian Mobile News Awards 2008
Mobile Operator of the Year – India
Ø Asian Mobile News Awards 2007
India Operator of the Year Award
Ø GSM Association Award
Best Billing and Customer Care Solution - 2006 & 2007
H. Business Focus
Idea Cellular, one of India leading mobile telephony service
providers, will outsource some of its operations to global IT
giant IBM in a 10-year $800 million deal. "The Indian unit of
IBM will manage and support Idea's IT infrastructure and
other services including billing and customer management on a
revenue-sharing basis," Idea Cellular managing director Sanjeev Aga told a news
conference here Wednesday.

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"We will harness IBM's power to support Idea's explosive growth with robust
best-in-the-class solutions. It will give us business focus, apart from containing costs,"
Aga said without giving any details on the cost savings.
Idea Cellular, part of the Aditya Birla Group, is the country's fifth largest mobile
service provider with a subscriber base of 13.6 million at the end of February.
"IBM will bring its deep global expertise in business transformation and
innovation to enable Idea to meet its customer value, business growth and productivity
objectives," said IBM South Asia and India managing director Shanker Annaswamy.
Asked if IBM would work with the London-based telecom major Vodafone that is
acquiring Hutchinson's stake in Idea's competitor Hutch India, IBM's vice-president
(communication sector for Asia-Pacific) Ramesh Awtaney said: "Globally, IBM has over
100 telecom clients big and small including Vodafone and Telstra of Australia. IBM is
free to strike similar alliances in India." IBM can also work with Vodafone in India but we
are yet to receive such an offer.
As with Idea, IBM had in 2004 signed a 10-year, $750 million revenue-sharing
deal with India's top mobile firm Bharti Airtel to manage its core IT infrastructure.
"That deal is now estimated to have gone up to more than $1.5 billion, helped
recent robust growth in Bharti's subscribers base and increasing revenue," an IBM
official told IANS.
I. Product and Services
Ø Idea Cellular provides 3G services using digital GSM technology. We offer
GSM voice and data services in all of the regions in which we currently operate.

26. 26
Ø In addition to basic mobile voice telephony services, we offer a wide range of
value-added and data services. These include Voicemail, DUAL SIM card
capabilities, Missed-call alerts, SMS, GPRS services and e-mail services.
Ø It offers Pre- and Post-paid Voice, MMS and Internet Access Services.
Ø The 13 circles where IDEA Cellular operates are further categorized into
established and new service areas.
Ø SMS based services to Voice based ones, the Idea range cuts across all
modes of communication to ensure the BEST VALUE for your money
Ø It provides downloading the latest ring tones or sharing the freshest of blonde
jokes, be it checking the status of your cousin's train arrival time or arranging a
pick up for your boss's delayed flight, Idea hands you the power to do it all.
J. Company Strategy
Idea Cellular plans to focus on its customer service and customer experience
aspects to market itself in the Karnataka,Tamil Nadu telecom circle
The company has applied for licences to operate in the telecom circles of Tamil
Nadu, Karnataka and Punjab and is awaiting clearances.
Mobile penetration in the Tamil Nadu telecom circle is about 80 per cent the
highest in India — and would merit a different marketing strategy compared with other
telecom circles. Though there is no detailed marketing strategy in place yet, the
company plans to leverage its `top quality' network infrastructure thereby assuring better
customer experience, he told Business Line on the sidelines of the company's road
show, organised in connection with its upcoming initial public offering.

27. 27
"Today churn level (movement of customers from one mobile service provider to
another) is low at about 5 per cent nationally. Customers are moving mainly because of
network related problems such as instability, call drops and congestion," he said. The
best way for Idea Cellular to enter the Tamil Nadu market would be by promoting its
stable and efficient networks
K. Subscriber base
Idea's subscriber base as of July 2009 according to the [4] is as follows
Ø Maharashtra and Goa - 8077848
Ø Madhya Pradesh and Chhattisgarh - 5677758
Ø Andhra Pradesh - 5528758
Ø Kerala - 4738070
Ø Gujarat - 4230479
Ø Uttar Pradesh (West) & Uttarakhand - 4602390
Ø Delhi - 2343017
Ø Haryana - 1701065
Ø Uttar Pradesh (East) - 2361070
Ø Rajasthan - 1603620
Ø Himachal Pradesh - 164571
Ø Mumbai - 1012152
Ø Bihar & Jharkhand - 1702584
Ø Tamilnadu - 225566
Ø Orissa - 164995
Ø Punjab (Spice) - 2566170
Ø Karnataka (Spice) - 1816711
Totalling to 48,516,824 or 14.90%(Approx.) of the total 325,701,124[2] mobile
connections in India.

28. 28
L. Balance sheet
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Sources of funds
Owner's fund
Equity share capital 2,635.36 2,592.86 2,259.53 2,742.53 2,742.53
Share application money 3.76 - - - -
Preference share capital - - 483.00 - -
Reserves & surplus 906.91 -413.71 -
1,574.00
-
1,695.74
-1,719.90
Loan funds
Secured loans 5,454.43 3,539.77 1,470.75 1,692.75 1,506.41
Unsecured loans 1,060.33 710.74 1,444.85 1,005.28 757.13
Total 10,060.79 6,429.66 4,084.14 3,744.83 3,286.16
Uses of funds
Fixed assets
Gross block 12,791.22 8,229.61 3,975.11 3,577.49 3,275.36
Less : revaluation reserve - - - - -
Less : accumulated depreciation 3,123.83 2,637.18 1,157.63 899.99 667.25
Net block 9,667.39 5,592.43 2,817.48 2,677.50 2,608.11
Capital work-in-progress 941.13 506.52 95.91 64.62 74.41
Investments 569.93 13.83 307.03 307.03 92.03
Net current assets
Current assets, loans & advances 1,674.14 2,550.93 1,637.35 1,174.45 960.25
Less : current liabilities & provisions 2,791.81 2,234.05 773.63 478.76 448.64
Total net current assets -1,117.67 316.88 863.72 695.68 511.61
Miscellaneous expenses not written - - - - -
Total 10,060.79 6,429.66 4,084.14 3,744.83 3,286.16
Notes:
Book value of unquoted investments 569.93 13.83 307.03 - -
Market value of quoted investments - - - - -
Contingent liabilities 2,308.87 1,236.57 213.92 - -
Number of equity sharesoutstanding (Lacs) 26353.61 25928.61 22595.27 27425.27 27425.27

29. 29
M. Profit loss account
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Income
Operating income 6,719.99 4,366.40 2,007.07 1,625.42 1,165.52
Expenses
Material consumed 0.01 5.26 0.04 0.03 0.09
Manufacturing expenses 2,867.83 1,497.78 664.27 172.26 139.11
Personnel expenses 332.88 251.43 115.08 103.36 70.56
Selling expenses 322.43 514.17 213.60 - -
Adminstrative expenses 705.52 483.86 243.64 755.44 615.42
Expenses capitalised - -0.08 -0.04 - -
Cost of sales 4,228.66 2,752.42 1,236.58 1,031.09 825.17
Operating profit 2,491.33 1,613.98 770.49 594.33 340.35
Other recurring income 88.43 20.32 3.71 9.67 15.18
Adjusted PBDIT 2,579.76 1,634.30 774.19 604.00 355.53
Financial expenses 695.85 478.26 308.25 255.04 253.56
Depreciation 756.85 563.67 262.88 237.78 200.34
Other write offs 119.91 108.14 84.66 84.49 108.54
Adjusted PBT 1,007.14 484.24 118.40 26.69 -206.91
Tax charges 72.50 6.99 2.90 - -
Adjusted PAT 934.65 477.25 115.50 - -
Non recurring items 95.74 7.32 1.49 - -
Other non cash adjustments 13.97 5.23 8.61 -2.53 34.20
Reported net profit 1,044.36 489.79 125.60 24.16 -172.72
Earnigs before appropriation -1,406.49 -2,450.86 -1,673.84 -1,795.58 -1,819.74
Equity dividend - - - - -
Preference dividend - - - - -
Dividend tax - - - - -
Retained earnings -1,406.49 -2,450.86 -1,673.84 -1,795.58 -1,819.74

30. Comparison
A. No of
Company
Airtel
Idea
Reliance
TATA Indicom
Vodafone
0
10
20
30
40
50
60
70
80
90
No of Subscriber (Till February 2009)
Comparison
No of Subscriber (In Million)
No of Subscriber (Till February 2009)
88.32
40.01
66.29
32.79
63.34
No of Subscriber (Till February 2009)
No of Subscriber (Till
February 2009)
30
(Till February 2009)
No of Subscriber (Till

31. Company 2009 2008
Airtel 34014.29 25703.51
Idea 9916.45
Reliance 13610.58 13416.19
TATA
Indicom
3749.43
MTNL 4576.53
0
1000
2000
3000
4000
5000
6000
7000
8000
1 2
B. Sales
2008 2007 2006
25703.51 17794.43 11228.68
6719.99 2795.25 -
13416.19 11725.26 5951.70
3283.20 4040.22 3781.00
4728.75 4923.40 5560.99
3 4 5
Airtel
Idea
Reliance
TATA Indicom
MTNL
31
2005
7903.02
-
-
3303.00
5565.42
TATA Indicom

32. Company 2009
Airtel 7743.84
Idea 1008.21
Reliance 2352.93
TATA
Indicom
515.95
MTNL 214.83
0
1000
2000
3000
4000
5000
6000
7000
8000
1 2
C. Profit
2008 2007 2006
6244.20 4033.22 2012.07
1044.39 277.72 -
2586.45 2408.85 1291.20
304.46 433.26 468.70
507.32 527.37 577.66
3 4 5
Airtel
Idea
Reliance
TATA Indicom
MTNL
32
2005
1210.68
-
5.65
756.40
946.05
TATA Indicom