Idea Cellular’s spectrum acquisition to push up annual capex by Rs 1,000 crore

Idea Cellular’s acquisition of airwaves in this year’s auction will result in a Rs 1,000 crore increase in planned capital expenditure for the year, managing director Himanshu Kapania said.

The company expects it will need to make an upfront payment of about Rs 6,000 crore for the spectrum purchased in the auction. Idea was looking to get a slot of 5MHz in the 1800 MHz band in Mumbai but settled for one in the 2100 MHz band, which it can still use to launch 4G services, Kapania said. “We didn’t get it (1800 MHz) in the price that made sense so we switched to 2100 MHz,” he said.
The company’s 4G footprint will now cover an area that generates 94% of its revenue from a little over half earlier, he added. Idea strengthened its position in Maharashtra and Goa, Uttar Pradesh – West & East, Madhya Pradesh and Chhattisgarh, Rajasthan, Bihar, Gujarat, Kerala, Andhra Pradesh, Telangana, Himachal Pradesh, Haryana and Punjab, the company said in a statement. Kapania said Idea added 35 slots of 5MHz each to its 12 existing 4G and two 3G slots.
Between the two standards, the Aditya Birla Group company can now offer broadband services throughout the country, Kapania added. Most of the upfront payment will be made through internal accruals, although the company will raise a “small portion of debt” to fund it, he said.