Aircel is seventh service provider to enter Mumbai

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Mumbai: The country’s fifth largest GSM mobile service provider, Aircel on Thursday launched its services in the already overcrowded market, Mumbai. The company already has 18 million subscribers and with its launch in this circle, it will have a presence across 17 circles. The service provider will initially bring in pre-paid services and launch its post-paid services after two weeks. It will also launch localised value-added services (VAS) as well as a WAP portal in Hindi.

Aircel will now directly compete with six GSM operators – Airtel, MTNL, Vodafone Essar, Idea, Reliance Communications and Loop Mobile – in Mumbai. Tata Teleservices (Maharashtra) offers CDMA services, while Reliance Communications offers both GSM and CDMA platforms. New operators Datacom, Swan, Unitech and Loop Telecom are also expected to launch their services in Mumbai. According to analysts, the telecom sector is observing a churn rate of 3% on a monthly basis. The company would be able to enter the fierce competition in Mumbai only after introduction of mobile number portability (MNP). Aircel also said that it expects its VAS revenues to touch 15% by 2011 from 7 % as of now.

The firm currently has 1,000 cell sites in Mumbai and will be increasing it to around 2,000 sites by the year-end. Gurdeep Singh, chief operating officer, Aircel, said, “We have already invested around Rs 550 crore in setting up these sites in Mumbai and will be increasing it to 2,000 sites by investing Rs 1,100 crore by the end of this year.” Aircel currently has 20,000 sites pan India and it is targeting around 40,000 sites by the end of this year. Currently, its tenancy ratio is 1.2. The firm also said that it will invest $5 billion in the next 3-4 years to launch services in the remaining five circles and upgrade existing network in other circles. It will launch its services in the rest of Maharashtra and Goa circle by May 2009 and pan-India by mid 2010. This would include Gujarat, Madhya Pradesh, Rajasthan, Punjab and Haryana. Aircel has licenses across 22 circles in India. Commenting on its possible acquisition of Loop Mobile, Singh said, “We are sufficiently funded internally to meet our commitments and so we are not looking at raising any funds at the moment. We are not looking at acquiring Loop Mobile.”