Idea Cellular to soon follow Airtel and Rel Jio in offering 4G services

After Reliance Jio Infocomm, Bharti Airtel and Vodafone India, Idea Cellular also hopped on the bandwagon and will roll out 4G services next year in 2016.

Idea chief executive Himanshu Kapania last week announced that the company was striving to deploy 4G services within the first half of 2016.

Idea Cellular has advanced its 4G plans by a year and the company plans to offer 4G in 10 service areas.

Kapania said that the technology ecosystem evolved faster than the company had anticipated.

"We are also positively surprised at the speed of availability of a wide range of affordable 4G smartphones and devices. Therefore, post careful analysis of LTE technology, maturity and consumer demand surge across markets like China, Indonesia and other similar markets, Idea has decided to initiate necessary steps culminating into launch of Idea's own 4G services on LTE platform from calendar year 2016 in a phased manner,” the Idea chief executive said.

Reportedly, Idea's capex plan has surged six-fold from Rs 1,000 crore to Rs 6,000-6,500 crore this fiscal year for the 4G play.

Idea said its days of incremental capital expenditure were a thing of the past.

"We maintain a negative stance on the company due to increased capex needs for supporting robust data growth and the threat of Reliance Jio, which could pressure tariffs, both on voice and data, resulting in muted revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) growth," Vivekanand Subbaraman of HDFC Securities told Economic Times.

Meanwhile, Idea Cellular feels vulnerable to Reliance Jio's competitive assault but still says its customers can still afford some lag in new technology adoption.