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Treating internet services as a pipe is not the best way for a telco: Idea’s Himanshu Kapania

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Idea Cellular launched its 4G services in December 2015 and CEO Himansu Kapania, in an analyst call, said that the 4G era is not going “to be a battle of rates or war of the corporates.” Instead, Kapania believes that the 4G era will be about building an ecosystem of digital services.

Kapania also explained that Idea sees 4G as a capacity building technology rather than a technology for speeds. 4G, in his view has only a niche application for HD videos.

So 4G is not all about speeds or better consumer experience, it is about having a larger capacity than 3G. We are treating a combination of 3G and 4G as an overall available wireless broadband infrastructure for consumers to access daily need internet applications. 99.9% needs of Indian applications will be serviced by 3G and or 4G. They are both interchangeable as far as we are concerned.

“It is going to be about influencing and changing mindsets of millions of Indians who have never experienced internet and are waiting to become the netizens of tomorrow,” he said. Idea currently offers 4G services in 183 towns and cities across  Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Madhya Pradesh, Punjab, Haryana, and Chattisgarh.

Kapania also spoke of what the impact of Reliance Jio entering the market would be for telecom operators. “In my assessment, it is evident with the arrival of Jio, the present fragmented Indian telecom sector will consolidate and only telecom players with an ability to sustain an integrated offering including Voice, High speed mobile broadband services, Digital Sales and Service channel, Digital content and Payments services on a nationwide basis will thrive.”

Idea’s CEO also explained to an analyst  that “treating internet services as a pipe and just a plain simple pipe is not the best way for a telecom operator.”

The company has started investing in technologies where they can understand consumer usage of internet better, a digital sales and services channel, the digital content space, businesses in the digital wallet space.

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Number of 3G and 4G phone upgrades: Kapania also said the smartphone upgrades capable of 3G and 4G by Idea subscribers increased from 28.2 million at the end of January, 2015 to 55.5 million at the end of December, 2015.

Regarding the 700 Mhz spectrum auction: Earlier in January, the TRAI recommended a reserve price of Rs 11,485 crore per MHz for pan India airwaves for the next round of auctions. This includes the base spectrum pricing for 7 bands, including the 700 MHz spectrum which is being offered for the first time and supposedly offers high quality mobile broadband and 4G.

Idea said that it would be premature of the government to hold the auctions in their submission to the TRAI. “At this point of time we will be very-very prudent and cautious to participate big time on those kind of spectrums,” Kapania added.

Earlier, rival telecom operator Airtel also said that company would not be able to afford the 700 Mhz spectrum. “We believe that the price that has been set or proposed for 700 MHz just makes it very, very expensive for us to buy any of that spectrum, so we believe we cannot afford to buy that spectrum at that price,” Gopal Vittal, Airtel India CEO said.

Download: Transcript 

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