We need to re-engage with the regulator on call drops: Himanshu Kapania

Interview with CEO, Idea Cellular

Idea Cellular posted slower profit and revenue growth in the July-September quarter. Himanshu Kapania, chief executive officer, talks to Sadananda Mohapatra on strategy to deal with lower realisations, call drops and its foray into a payments bank. Edited excerpts:

Idea's results were weaker this time due to pressure on both call and mobile data rates. How do you see these affecting your margins with the intense competition and what is your strategy to deal with the issue?

Yes, voice rates have declined; I expect these to stabilise at the current rate of 32.7p a minute. Data users are still a lower percentage of our total customer base. Eventually, it will be volume-led growth.

In the past six months, Idea has spent Rs 3,100 crore for network expansion and installed 11,676 sites for upgradation. Still, the telecom regulator said, there has not been any improvement for call drop problems. There is a possibility that operators would have to pay customers for each call drop. What is your reaction?

The physics of radiowave communication does not allow 100 per cent coverage everywhere. Globally, a two per cent call drop is allowed. Second, Indian telecom operators face unique challenges such as absence of a national tower policy, lack of scientific study on effects of radio waves, and spectrum availability issues. We need to re-engage with the regulator about the issue.

The regulator says operators also need to invest in software technologies that will allow automatic network optimisation, freeing bandwidth on peak voice and data use hours automatically. Does Idea need to do something in this regard?
We will use whatever opportunity is there for network expansion and upgradation.

Tell us about your plans for the payments bank licence you've got, to be set up with Aditya Birla Nuvo. Idea also has a digital wallet which has not been much publicised. How will you take both forward?

We are in the process of converting the joint venture between us and Aditya Birla Nuvo into a company. We plan to launch the bank towards the end of 2016. Our digital wallet is already present in four (of 22 telecom) circles and has 150,000 users. We were earlier slow about it (the digital wallet) but now that we have got the bank licence, we plan to expand it to a pan-India basis from the next financial year.