Airtel, Vodafone, BSNL increasing their coverage.
While economic recession may have bitten new investments hard, the telecom sector looks set to witness a flurry of activity as it expands into hitherto uncharted territory. Three GSM mobile services providers are hitting the ground running in their foray into Karnataka. These companies are looking to pump in close to Rs 3,000 crore to establish their presence in the Karnataka market, presently growing at a blistering pace.
Reliance Communications, Aircel and Idea from the Aditya Birla Group are set to take on established players Airtel, Vodafone and BSNL in a market which grew at 60 per cent last year with a total subscriber base of 21 million. Bharti Airtel currently leads the pack with close to 10 million subscribers in Karnataka.
However, further transformation lies ahead for the market with Reliance Communication rolling up its sleeves to go all out in the state. Reliance is set to invest around Rs 800 crore to establish its state-wide network. The company already has a strong footprint in the CDMA segment in Karnataka with around 4 million subscribers; and is set to replicate its coverage with the GSM platform as well, being the only operator to offer both services.
According to Reliance Communications, Karnataka is part of its largest launch worldwide — the Reliance network covers over 2,000 towns and 18,000 villages in India. “With the launch of its enhanced GSM service, Reliance customers will now be able to use a range of over 250 handsets and devices. Reliance customers can now roam on more networks globally in over 200 countries — offering a wider choice to customers in India,” a source in the company noted.
The company, with a customer base of over 60 million, including over 1.7 million individual overseas retail customers, ranks among the Top 10 Telecom companies in the world by number of customers in a single country.
While Reliance is stepping on the gas, Aircel, majority-owned by Maxis of Malaysia is set to invest Rs 1,100 crore over the next year to set up base stations across the state. Aircel chief operating officer Gurdeep Singh said recently that the company has so far spent Rs 550 crore as start-up investments in Bangalore, becoming the ninth cellular operator to start operations in the city.
A late entrant into the state, the Chennai-based firm will set up 1,200 new base stations in Karnataka over the next two months, from 500 base stations currently, as it expands operations in the Bangalore Urban and Rural districts.
“Bangalore has a penetration rate of 78 per cent, and this is indicative of the huge potential the market holds for us. Many overseas markets have penetration rates in the region of 130 per cent or so. Hence, we see a huge scope to widen the market further through innovative product launches and value-adds,” Singh said.
Airtel did not appear to be unduly bothered by the developments. A Airtel spokesman said in Bangalore, “Fundamentally, we have a good coverage and our products are good value for money. We have a good lead over the competition; our nearest competitor has around 4 million subscribers.”
While Aircel is a relatively new entrant, Aditya Birla Group-owned Idea Cellular, after its takeover of Spice Telecom recently, is aggressively rolling out plans to build on Spice’s 1.4 million subscriber base in Karnataka. With the Karnataka launch, Idea has become the third largest private GSM player in the country with over 36 million subscribers. Idea plans to increase its coverage to 11,200 towns and villages from the present 3,410 by March 2010. Even as Karnataka stands at the epicentre of the next mobile wave, the clear ‘disconnect’ between economic recession and mobile spending will definitely be to the customer’s advantage.
