Aircel management has told us that it is focused on value-added services and completing pan-India rollout with a target of 100m subscribers by 2012. Management expects tariff pressure to continue for 6-9 months before stabilising; consolidation unlikely until mid-2011.
Aircel plans to expand to 100m subscribers by 2012 (currently 31m). The benefit of the recent tower sale – immediate cash inflow of USD1.8bn; provides them access to an incremental 20,000 towers, which results in capex savings of USD1bn. The tower transaction allows the company to complete a pan-India rollout and expand operations in existing markets. Aircel plans to increase base station deployment from 38,000 now to 80,000 and achieve population coverage of 70% (80-90% revenue clusters) in the medium term.
Aircel’s Views on Indian Telecom Tariff War – current low pricing levels are not sustainable. However, the expected launch by new players could result in further downward pressure over the next 6-9 months.
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