Idea Cellular will “embark on a massive cost saving initiative in calendar year 2017” across its operation in order to “optimize costs, eliminate wastage and duplication, digitize processes, and simplify (operations),” the company’s Managing Director Himanshu Kapania mentioned in a recent analyst call. Kapania did not mention when the cost cuts would be carried out but added the “the impact of some of these cost reduction initiatives should reflect in the financial year 2017-2018 results.” Cost reduction at Idea comes at a time when the company is losing 4G subscribers to new entrant Reliance Jio, which is just starting to charge users, having launched with an everything-free offer around 5 months ago. Jio largely bets on a 4G-only network and has already added 100 million subscribers since launch. To keep up with the completion, Idea is currently evaluating options to merge the company with rival operator Vodafone, although a definite deal wasn’t signed. Speaking on the impact of Jio, Kapania claimed that the entire telecom industry “witnessed an unprecedented disruption… For the first time in its history, the flourishing Indian wireless sector is trending towards an annual revenue decline of 3% to 5% in FY17 against FY16.” Kapania adds that the current multi-operator scenario in the telecom industry “will eventually consolidate” and that telcos with an “ability to sustain an integrated offering including voice, high-speed mobile broadband services, digital services including content, and mobile payments services on a nationwide business will thrive.” On falling voice rates and how Idea plans to…
