Is Idea Cellular emerging company of the year?
If Victor Hugo were alive today, Idea Cellular could have
made him proud. “Nothing is as powerful as an idea whose time has come,” is probably
the best way to sum up the cellular company’s progress.
What was once an
also-ran mobile phone company, Kumar Mangalam Birla’s Idea now rubs shoulders
with giants such as Bharti Airtel and Vodafone-Essar. Thanks to the patient,
but painful, assembling of many tiny units on its way to realise the idea of a
multi-billion dollar mobile phone company.
Idea Cellular is part of the AV Birla Group whose business interests range from aluminium to cement to retail. Idea, ET’s Emerging Company Of The Year, now has more than 56 million subscribers, making it the fourth largest in the sector.
The business of mobile phones was probably one of the last ideas of the legendary businessman, Aditya Vikram Birla, before he passed away in 1995. Aditya Birla gave a thumbs up for the joint venture between his nascent telecom company and the iconic AT&T, which traces its roots to the inventor of telephone, Alexander Graham Bell.
The wireless story in India was unknown then and, for most businessmen, it was a sector that gulped hundreds of crores of investments with no returns in sight. The Birlas were among the few who took the plunge with the likes of Tatas, Modis, Nandas and the Goenkas. While many quit the race, Birlas stayed in the marathon.
It was a test of perseverance for four years before the National Telecom Policy, 1999, referred to as NTP 99, came along. “This was a watershed event,” says Idea Cellular’s MD Sanjeev Aga. “When I read NTP today, it is still contemporary and comprehensive.”
The policy moved from a fixed-licence regime to one that was revenue sharing. “The business model was going nowhere,” said Mr Aga, who is having his second term at the firm after quitting once in 2001. The problem with the fixed-licence fee regime was that the bids for licences were hopelessly optimistic, he said.
Idea had its share of romance too, when two of the biggest industrial houses, Tatas, Birlas, came together, probably for the first time ever, to try their luck in telecom. But these relationships did not last long, and Idea was to set on a solo sail. There were many hurdles in its journey. In 2001, the Batata triumvirate agreed to merge its operations with the Rajeev
Idea Cellular is part of the AV Birla Group whose business interests range from aluminium to cement to retail. Idea, ET’s Emerging Company Of The Year, now has more than 56 million subscribers, making it the fourth largest in the sector.
The business of mobile phones was probably one of the last ideas of the legendary businessman, Aditya Vikram Birla, before he passed away in 1995. Aditya Birla gave a thumbs up for the joint venture between his nascent telecom company and the iconic AT&T, which traces its roots to the inventor of telephone, Alexander Graham Bell.
The wireless story in India was unknown then and, for most businessmen, it was a sector that gulped hundreds of crores of investments with no returns in sight. The Birlas were among the few who took the plunge with the likes of Tatas, Modis, Nandas and the Goenkas. While many quit the race, Birlas stayed in the marathon.
It was a test of perseverance for four years before the National Telecom Policy, 1999, referred to as NTP 99, came along. “This was a watershed event,” says Idea Cellular’s MD Sanjeev Aga. “When I read NTP today, it is still contemporary and comprehensive.”
The policy moved from a fixed-licence regime to one that was revenue sharing. “The business model was going nowhere,” said Mr Aga, who is having his second term at the firm after quitting once in 2001. The problem with the fixed-licence fee regime was that the bids for licences were hopelessly optimistic, he said.
Idea had its share of romance too, when two of the biggest industrial houses, Tatas, Birlas, came together, probably for the first time ever, to try their luck in telecom. But these relationships did not last long, and Idea was to set on a solo sail. There were many hurdles in its journey. In 2001, the Batata triumvirate agreed to merge its operations with the Rajeev
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