No intention of monetising tower assets: MD Kapania

22 October 2015
The Economic Times

Idea Cellular wants to remain in the tower business and is therefore not looking at selling any of its telecom tower assets, said managing director Himanshu Kapania, in an interview with ET's Deepali Gupta. The firm has been reeling under pricing pressure on data services but users are upgrading faster from 2G services to 3G than new addition of subscribers signing on to 2G, showing a stagnation in 2G revenue, he said. The deployment of 4G networks is key to creating more capacity, even though adoption may take time, he said. Edited excerpts:

At a time when tower valuations are hitting a high do you intend to sell your own?
Idea has two interests in towers, first through its 16% in Indus Towers and the second it has 9,500 towers of its own. We would like to be in the tower space, so we have no intention of monetising it at this time.

Apart from pressure on pricing 2G data seems stagnant this quarter even though you said earlier that new rural customers being on boarded tend to come on 2G, keeping the technology relevant. Why?
There is addition of 2G subscribers but more are converting from 2G to 3G, so growth in 3G is also because some 2G customers moved, and new joined taking their place.

The cost of new customer acquisition has gone up. Why and how long will it sustain?
There has been a battle in the market place for acquisition of new customers leading to a rise in churn (of customers porting from one network to the next). It is hard to predict how long it will last.

Is this in anticipation of Reliance Jio Infocomm's entry expected in December?
This is a GSM battle not as much a data one.

Then why are companies rushing to launch 4G?
We don't believe the situation will change overnight. If you see 3G has been around for 2.5 years before it has stabilised. We are making the investment because we see the current rate of data growth, which has been 82% more than last year sustaining for a few years. There is going to be a capacity demand.