Idea Cellular launches 4G ahead of Reliance roll-out

By Zeba Siddiqui

MUMBAI (Reuters) - Idea Cellular Ltd, India's third-biggest mobile phone operator, launched high-speed fourth-generation (4G) mobile phone services across the country's south on Wednesday, beating rival Reliance Jio.

Idea follows Bharti Airtel and Vodafone in offering high speed services in parts of India, starting with a handful of southern towns. It said all towns and cities in Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana would be covered by March 2016.

By June 2016, Idea estimated it should be able to reach 750 cities, in telecom "circles" - or districts - which cover over 50 percent of the telecom market but over 60 percent of its gross revenue.

With about 980 million wireless users, India's mobile market is second only to China's. Carriers have spent billions of dollars buying airwaves to meet growing demand for higher quality and faster data connection, as more and more Indians access the Internet through their smartphones.

But the country's already crowded telecoms industry is bracing for the arrival of RJio, the telecoms arm of Reliance Industries Ltd, which had been due to launch the country's biggest 4G broadband network "around" this month.

Analysts and industry executives now expect the launch of the telecoms business run by India's richest man, Mukesh Ambani, to be delayed until at least spring 2016.

It will launch the service for employees this weekend.

That delay has given some of RJio's rivals more time to try to get ahead with their own 4G services and bulk up.

Heavily indebted Reliance Communications, owned by the younger Ambani brother, Anil Ambani, is in talks with Aircel to create India's second-largest mobile operator.

It had already agreed the acquisition of Russian conglomerate Sistema's mobile phone business in November - the first major Indian telecoms deal in seven years, and expected to pave the way for others.

Idea said it was offering plans on a par with 3G and trial packs for just 29 Indian rupees (44 U.S. cents), anticipating steep discounts that RJio is expected to offer.

And the prospect of a large scale 4G roll-out has also fuelled a race for cheap content to lure consumers to take up more lucrative data packages. Idea said it would offer a library of films for a monthly price of 49 rupees - 29 rupees for initial subscribers.

($1 = 66.1367 rupees)

(Additional reporting by Karen Rebelo; Writing by Clara Ferreira Marques; Editing by Subhranshu Sahu and Jane Merriman)