NSE Symbol: IDEA | BSE Code: 532822
Idea Cellular Ltd is the third-largest wireless operator in terms of the number of subscribers in India with revenue market share of roughly 15.9% of the Indian Mobile Telecommunications Services Industry (data: Q3,2017). Idea Cellular is a pan-India interspersed wireless broadband operator which offers 2G, 3G and 4G services to its customers. It owns National Long Distance (NLD) and International Long Distance (ILD) operations along with an Internet service provider (ISP) license. With nearly 200 million subscribers worldwide, Idea ranks sixth in the global rankings of operators in terms of subscribers. The company offers affordable and world-class mobile services to various segments of mobile users. It is an Aditya Birla Group Company and offers primary voice and short message service (SMS) services to high-end value-added and General Packet Radio Service (GPRS) services as well. The subsidiaries of Idea Cellular Limited include Aditya Birla Telecom Ltd, Idea Cellular Services Ltd, Swinder Singh Satara and Co Ltd, Idea Cellular Towers Infrastructure Ltd, Carlos Towers Ltd and Idea Cellular Infrastructure Services Ltd. Idea Cellular share price today stands at 36.95 rupees per share.
Idea Cellular Ltd Share Price History and Trends
Idea Cellular Ltd was chartered in the year 1995 with the name Birla Communications Ltd. The company acquired the license for providing GSM-based services in Gujarat and Maharashtra Circles in the original GSM license bidding process. In 1996, the company modified the name from Birla Communication Ltd to Birla AT&T Communications Ltd following the joint venture between AT&T Corporation and Grasim Industries. In 1997, they began operations in the Gujarat and Maharashtra Circles. In 2000, the company merged with Tata Cellular Ltd, thereby acquiring the original license for Andhra Pradesh Circle. In 2001, Idea Cellular Limited acquired RPG Cellular Ltd meanwhile bagging the license for the Madhya Pradesh and Chattisgarh Circle. Additionally, they obtained the license for rendering GSM-based services in Delhi Circle in the fourth operator GSM license bidding process. In the same year, the name of the company was changed from Birla Communications Ltd to Birla Tata AT&T Ltd.
In 2002, the company's name was again changed to Idea Cellular Ltd and the Idea brand name was launched. They began commercial operation in Delhi Circle. In June 2002, they procured Swinder Singh Satara & Company Ltd through an agreement on share purchase.
In 2004, the company procured Escotel Mobile Communications Ltd which was subsequently renamed as Idea Mobile Communications Limited. Idea commercially launched the EDGE services 2005 and it became the first operator in India to achieve that. In 2005, Idea won an Award for Bill Flash service at the GSM Association Awards held in Barcelona, Spain. Idea also sponsored the International Indian Film Academy Awards in the same year. In 2006, the company became a part of the Aditya Birla Group after the TATA Group transferred their shareholding entirely in the company to the Aditya Birla Group. The company had received a Letter of Intent from the Department of Technology for a new UAS License for Mumbai Circle. Furthermore, they received a Letter of Intent from the DoT for a new UAS License for the Bihar Circle via Aditya Birla Telecom Ltd. In the Financial Year 2006-07, the company initiated National Long Distance(NLD) service to carry part of the Company's own traffic. They launched the commercial mobile services to service the areas like Rajasthan, Uttar Pradesh (East) and Himachal Pradesh. They made an Initial Public Offering(IPO) and raised roughly 25,000 million. They won an award for 'Best Billing or Customer Care Solution' at the GSM Association Awards in Barcelona. In the same year, the company started a ten year business transformation agreement to integrate, innovate, and transform the business processes and IT infrastructure with the International Business Machines (IBM). They signed a 500 million dollar contract with Nokia Siemens Networks for expanding and strengthening the Company's network. Moreover, they singed a 343 million USD contract for GSM expansion with the company, Ericsson in the Maharashtra, Madhya Pradesh, Gujarat, Rajasthan and Himachal Pradesh Circles.In June 2006, Escorts Telecommunications Ltd converted into a subsidiary of the Idea Cellular and the company was subsequently renamed as Idea Telecommunications Ltd. In February 2007, Idea acquired 10,000,000 equity shares of 10 rupees each of Aditya Birla Telecom Ltd, which is a company that holds the license to operate in the telecom service area of Bihar, for a purchase of 100 million rupees.
In the year 2007-08, the company increased its network reach roughly by three times, from 4,432 cities and towns to 13,308 cities and towns. They formed three new subsidiaries, Idea Cellular Infrastructure Services Ltd, Idea Cellular Services Ltd and Idea Cellular Tower Infrastructure Ltd. The principal purpose of Idea Cellular Services Ltd is to provide workforce to Idea Cellular. Idea Cellular Tower Infrastructure Limited and Idea Cellular Infrastructure Services Ltd sold off Idea's receptive infrastructure network. In December 2007, the company in alliance with Bharti Airtel and Vodafone Essar created a joint venture, namely the Indus Tower to provide passive infrastructure services in India to all the operators on a non-discretionary basis. In February 2008, the company won the Unified Access Services Licences for telecom service areas of Punjab, Karnataka and Tamilnadu which included Chennai, West Bengal, Kolkata, Odisha, Jammu & Kashmir and Assam.
In the year 2008-09, the company gained a 40.8% stake in Spice Communications Ltd (Spice), which has operations in Punjab and Karnataka Circles from MCorp Global Communications Pvt Ltd, the earlier promoters of Spice. They started off services in Mumbai, Orissa, Tamil Nadu, Jammu & Kashmir and Kolkata. Additionally, Aditya Birla Telecom Ltd, which is a completely owned subsidiary of Idea that launched operations in the Bihar and Jharkhand service areas .In the same year, the company had a tie-up with Indian Oil Corporation to use their petrol pumps and gas agencies for the distribution and branding of Idea Recharge Vouchers and SIM Cards. They were one of the first operators in India to launch the Nokia Life Tools in association with Nokia. They began International Airtime Transfer, which is a unique VAS service, in which the NRI community can instantly recharge the prepaid numbers of the Idea subscribers in India through many international merchants and the web in Gulf, UK and USA. In the same year, the company had launched the NetSetter Data Cards and Blackberry solutions which were meant to cater to the data-savvy consumer segments. According to the scheme of arrangement, the company demerged the assets from their passive infrastructure in the service areas like Andhra Pradesh, Gujrat, Delhi, Uttar Pradesh, Haryana, Kerala, Mumbai and Rajasthan to Idea Cellular Towers Infrastructure Ltd, which is a completely owned subsidiary whose appointment date of January 1, 2009.
In the year 2009-10, the company extended their pan-India presence through their service launches in Orissa, Tamil Nadu, Jammu & Kashmir Kolkata and Assam service areas, thereby making it a nation-wide service provider. As one of Ideas new activities of VAS, the company launched Buddy Recharge - which is a unique peer-to-peer talk time transfer product. They launched Oongli Cricket in the IPL season. The company launched a standard self-care porta,l CARE which informs the customer on the products, tariffs and account related information. Idea was one of the first operators to launch Pre Tones, which is an innovative VAS service that allows the user to listen to the caller tune of his/her own choice instead of the responder's caller tune.
According to the scheme of arrangement, the company's telecom operations of Bihar service area along with some assets and liabilities of Aditya Birla Telecom Ltd, which is a wholly owned subsidiary that was de-merged in March 2010. Spice Communications Ltd which had operations in Punjab and Karnataka Circles and the permit for National and International Long Distance operations was united with the company in March 2010. Also, Carlos Towers Ltd turned into a subsidiary company after the merging of the companies. In April 2010, the company acquired the License for administering pan-India Internet Services (ISP License). In the auction for 3G Spectrum, the company surfaced as the highest bidder for 11 Service Areas at a collective cost of 5,768.59 crores. In the review year, the company became a pan-India operator after the rollout of services in the residual service areas of Orissa, Tamilnadu, West Bengal, Jammu & Kashmir,Kolkata and Assam.
In January 2011, the Company launched mobile number portability (MNP), which acted as an invitation to all Indian mobile customers to switch their wireless operator, while retaining their mobile number. In March 2011, the Company launched 3G services in 9 out of these 11 controlled service areas. The Company also entered into bilateral roaming settlement with leading operators for offering 3G services for the service areas in Kolkata, Mumbai, Bihar, Delhi, Karnataka and Tamil Nadu.
In 2012, Department of Telecom (DoT) has stated that the proposal of Malaysia based Axiata group on raising 1% stake in Idea cellular to 21% would not create any new security threat for the country. The company won the prestigious World Communication Awards 2012 (WCA) under the category of Best Brand Campaign at an award ceremony held in London. The company also gained the prestigious World Communication Awards 2012, for the second consecutive year.
In 2013, the company signed Unified License with the Department of Telecommunications. Idea Cellular introduced buffet plans for its post-paid subscribers.
In 2014, the company won a 900 MHz bandwidth after a bidding auction for Delhi and also 4G in 8 strategic markets.
In 2015, Microsoft tied up with Idea Cellular to begin the billing operator on the Windows Store for Idea subscribers. Idea has successfully preserved the important 900 MHz spectrum and it also won the 54 MHz of 900 MHz spectrum. Videocon Telecommunications sold its owned spectrum in Gujarat and UP (West) circles to the company at a value of Rs 3,310 crore during the year. The company launched a world-class, high-speed 4G LTE services in all four Telecom service areas of South India. The company launched 4G in all five states of Telangana, Karnataka, Tamil Nadu, Andhra Pradesh and Kerala.
In 2016, Idea Cellular launched its 4G services across the principal markets that include Madhya Pradesh, Chhattisgarh, Odisha, Punjab, Haryana, Himachal Pradesh and North East Service Area. The company acquired the spectrum in FDD technology on the 1800 and 2100 bands, and in TDD technology it won the spectrum on 2300 and 2500 bands to achieve a holistic pan-India wireless broadband footprint. In March 2016, Idea Cellular and Videocon Telecommunications Limited agreed to cease their initial agreement linked to the Transfer of Right to Use 1800 MHz Spectrum in two service areas with direct effect. Earlier, in November 2015, the Board of Directors of Idea had allowed the company to penetrate the acquisition agreement for acquiring the right to use 1800 MHz spectrum of the Videocon Telecommunications Limited or VTL in the Gujarat and U.P. (West) service areas for an aggregate consideration of roughly 3310 crores which followed the Department of Telecom Guidelines for the Trading of Access Spectrum by the Access Service Providers on 12th October 2015. The Board of Directors of Idea Cellular in the meeting that happened on 28 April 2016 decided to incorporate the company's business of rendering tower infrastructure services through roughly 7,997 telecom towers that are operated across India with its completely owned subsidiary, Idea Cellular Infrastructure Services Limited (ICISL) which is involved in the business of providing tower infrastructure services in Odisha and Bihar. For the implementation of this transaction, business transfer agreement was executed between the Idea Cellular and ICISL. ICISL issued approximately 10,000 equity Idea Cellular share for the tower infrastructure undertaking. The transference of the tower infrastructure undertaking to ICISL was expected to be completed in 3-6 months.
In January 2017, Idea Cellular declared the launch of three new exciting entertainment apps - Idea Movie Club, Idea Music Lounge and Idea Game Spark. New suite of integrated Digital Apps has one of the excellent range of entertainment content for its around 200 million customers. With the launch of these digital products, the company had transformed from a mobile operator to integrated digital services and solutions provider. in March 2017, Idea Cellular and Vodafone Group Plc stated that they had reached an agreement to integrate their operations in India (excluding the 42% staked owned by Vodafone in Indus Towers) to build India's largest telecom operator. The merged company became the leading communications provider in India with about 400 million customers, with nearly 35% customer market share and around 41% revenue market share. The brand approach of the merged company was developed in due course and it was aimed at leveraging customers affinity for both the brands, that was built over the past decade. The merged company had adequate spectrum to compete with the other major operators in the market efficiently. It held about 1,850 MHz, including Circa 1,645 MHz of liberalized spectrum that was acquired through auctions. The merged company was capable of building a substantial mobile data capacity, employing the largest broadband spectrum portfolio with thirty-four 3G carriers and 129 4G carriers throughout the country. Vodafone India's strong presence in metros and Idea's leadership in semi-urban and rural telecom markets allowed for national leadership within the Indian M&A guidelines. In the circles where both Idea and Vodafone India had an insufficient presence, the merged entity became the leading challenger with the ability to compete more efficiently and enhance the consumer choice. In May 2017, Idea Cellular publicly stated that it had completed pan-India 4G rollout along with the launch of the 4G services in Mumbai on the 2100 MHz spectrum band. In July, 2017, Idea Cellular Limited stated that the Competition Commission of India had approved the proposed merger of Vodafone India and Vodafone Mobile Services Limited with Idea Cellular under Sub Section (1) of Section 31 of the Act. The transaction was expected to conclude during 2018 subject to the mandatory approvals. In September 2017, Idea Cellular proclaimed that it had accomplished a major milestone in its growth journey. The company has quickly expanded its network to 260,000 sites countrywide with 50% of the sites dedicated to the mobile broadband services, making it India's Big 4G network. Idea combined about 50,000 broadband sites since the last 12 months period ending August 2017, increasing its broadband footprint to cover 5,888 towns and around 105,755 villages and reaching out to 45% of population of the country. It set up an optical fiber network of roughly 150,000 route km to increase its wireless broadband services. In November 2017, Idea Cellular and Vodafone India declared that they had agreed separately to sell their standalone telecom tower businesses in India to the company, ATC Telecom Infrastructure Private Limited, which was subsidiary of American Tower Corporation, for the aggregate enterprise value of 7850 crores.
In January 2018, Idea Cellular Limited publicly announced that the National Company Law Tribunal Bench at Ahmedabad had sanctioned the Composite Scheme of Amalgamation and Arrangement among Vodafone Mobile Services Limited, Vodafone India Limited, Idea Cellular and their respective shareholders and investors. In February 2018, Idea Cellular closed the allotment of 32.66 crore equity shares to their promoter Aditya Birla Group entities at an issue-price of 99.5 rupees per share which aggregated to 3250 crores. As a consequence of this preferential allotment, the total shareholding of the promoter group in Idea had grown from 42.4% to 47.2%. The company allotted approximately 42.42 crore equity shares of face value of 10 rupees each to the qualified institutional buyers at an issue price of 82.5 rupees per equity share, which aggregated roughly to 3500 crores. This equity increment of 3500 crores along with a recent infusion of 3250 crores by Idea's promoter or promoter group will be reducing Idea's total debt by approximately 6750 crores.
Should You Buy Idea Cellular Stocks?
While buying a stock, it is essential to look at the future prospects of the company, especially if you’re looking for growth in your portfolio as an investor. However, since Reliance Jio has entered the market, there has been a revenue drop in all the wireless network provider companies. Analysts suggest that investing in Idea Cellular Limited could be beneficial in the short-run, but the volatility of the stock is immense. The company is still struggling with high leverage and debt levels and it might be unable to make capex infusions to increase its 4G penetration. It is better to avoid investing in Idea stocks for the long run. However, if the company manages to increase its number of subscribers and pacify the competition faced in the medium to long-term, you can invest in the company’s stocks.