Idea eyes exit option for 3 Escotel circles

Idea Cellular plans to surrender or sell three non-functional mobile licences of the recently-acquired cellular company Escotel.

According to company sources, the financial viability of launching services in Uttar Pradesh (east), Himachal Pradesh and Rajasthan, in which Escotel is the fourth operator, is now being evaluated.

Idea acquired Escotel, which has licences to operate in six circles, including Kerala, Uttar Pradesh (west) and Haryana, for Rs 1,100 crore in January this year. The Escotel brand is being named Idea in these three circles, sources said.

Escotel had not commenced operations in UP (east), HP and Rajasthan owing to paucity of funds. Industry sources said Idea is considering a resale of the spectrum to another company or surrendering three licences and claiming back the fee if it was found that launching services is uneconomical.

On the brand change of Escotel to Idea and 'Chit Chat' for pre-paid-card users, sources said the process will be completed in three to four months.

Escotel has over 2 lakh subscribers in the three operational circles. Industry sources said Idea is following a "ground-up approach" where employees of Escotel will be first communicated about the values and character of the brand. This will be followed by an intensive training to the retail chain.

"The process of physically changing the signage in each service centre location, dealer store, retailer shelf will then be completed and this is rounded up by a changeover in outdoor signage and hoarding across the area," they said.

Idea is also planning an advertising blitzkrieg for the new brand in the three circles, which will be followed by a formal communication to each post-paid subscriber.

The entire process will take 30-45 days, sources said. Changing the brand sign in the handset will take a longer time for legacy models.

In the first phase, new subscribers will have the brand 'Idea' on the screen. The handset vendors will also be requested to make a change in future models.