Idea Cellular Limited - Company Strategy Report
Idea Cellular is an Indian telecommunications provider which offers mobile services to customers across India. It offers 2G, 3G and 4G services to its customers and aims to increase its presence in digital services in the coming years to help transition the Indian masses to a digital life. Its plan to merge with Vodafone India would make it the world’s second largest and India’s largest telecommunication provider, overtaking Bharti Airtel.
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Idea’s robust service offerings enables it to increase service revenues
Idea harnesses its established presence in mobile market to increase its revenues. The company’s vast wireless networks keep its customers connected across India. It provides GSM-based mobile and other related telephony services to individual and business customers. This enables the company to generate substantial service revenues. The company's service revenues grew at 8.8% CAGR increasing from US$3,979.2 million in 2012 to US$5,577.6 million in 2016. The strong growth in the revenue was attributed to increased minutes of usage, along with increase in the realized rate per minute and data revenue.
Merger with Vodafone will provide significant growth opportunity
The company’s expected merger with Vodafone will likely change the market dynamics by creating a stronger entity in India. The main rationale behind the merger is cost savings and asset monetisation opportunities, supporting financial performance as the combined entity would earn higher revenues over time. In addition, the merged entity will hold 1,850 MHz of spectrum, which can allow the company to offer data speeds of up to 250 MB per second.
Catering to mobile users by launching a suite of digital entertainment apps
Idea Cellular launched three new mobile apps, Idea Music Lounge, Idea Movie Club, and Idea Game Spark. This new suite of integrated digital entertainment apps presents the best entertainment content to its subscribers. With the launch of such digital entertainment apps, the company has commenced its transformation from a pure mobile operator to an integrated digital services and solutions provider.