India’s third largest operator Idea Cellular has rolled out 4G service in ten of the country’s 22 service areas, reaching its target of covering 50 per cent of the country’s population by the end of fiscal 2015-16.
The operator said in a statement it offers 4G service in more than 300 towns, which represent more than 60 per cent of its revenue. It is targeting 550 towns, in the ten service areas where it has 4G spectrum, by 31 March (the end of its fiscal year) and 750 towns by the end of June.
To fund the rollout, Idea boosted capex by INR10 billion ($150 million) to INR75 billion for fiscal 2015-16, Live Mint reported.
Market leader Bharti Airtel has the widest 4G coverage, claiming service in nearly 400 towns and villages, and last week announced a spectrum trading deal that will expand it 4G footprint to 19 of the country’s 22 regions. The company invested $4 billion in its infrastructure last year to prepare for newcomer Reliance Jio’s nationwide 4G launch.
Idea was looking to expand into Uttar Pradesh (West) and Gujarat after signing a spectrum trading deal with smaller rival Videocon in November. But that INR33.1 billion ($499 million) agreement fell apart after Airtel worked out an agreement with struggling Videocon to purchase 10MHz of 1.8GHz spectrum in six service areas for INR44.28 billion.
Morgan Stanley expects increased pressure on mobile tariffs and rising capex requirements to fund spectrum purchases and data network rollouts to create cashflow challenges for Airtel and Idea for the next few years.