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I had the unfortunate instance of coming across an Idea Cellular subscriber. The complaints were related to call drops and inability to connect to international numbers.

While mobile number portability is an attractive option, yet the only drawback is that it cannot transfer the remaining balance to the operator you wish to get ported to. Repeated emails to their customer care went unanswered; I am glad we got rid of it.

A recommended option is to avoid it totally and look around for MNP.

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Birla’s group Idea snapped up Spice, one of the last stand alone players in the market. Idea cellular is no angel in white. Spice isn’t the best thing to have happened to mobile industry ever although, they were among the initial telecom players to have 900 Mhz spectrum and were the only big players having a huge monopoly for over 3 years. The promoters, Modi group, made huge amount of money. I remember my time in Karnataka when Spice was hell bent on promoting itself as “Southern Spice” and pioneered the use of minimalist advertising.

It isnt a bad deal for Idea. For the intellectually inclined, here is a spiel from Business Standard (although the link is guranteed to go dead soon):

At Rs 77 per share that Idea is shelling out for the loss-making Spice, the latter is valued at nearly 20 times forward enterprise value /ebitda (EV/ebitda) while at Rs 157, TMIL is valuing Idea around 15 times FY09 EV/ebitda. That’s possibly because at the end of the day Idea is a gainer from the buyout; it will be left with cash, which for a telco that’s planning to become a pan-Indian player and is now present in 13 out of 22 circles, can come in handy. So while Idea will pay Rs 2,700 crore for the stake in Spice, it will get Rs 7,200 crore from Telekom Malaysia, leaving it with a net Rs 4,500 crore.

I am jittery about the Telekom Malaysia investing here in India because they are known to be thugs in the big league. Remember the Salim Group which cosied up with the Left Government in Bengal? They paid a pittiance and got prime land at throwaway prices in order to set up “housing colonies” and malls.

This marks the formation of oligopolies although I am surprised that no other company offered better money for Spice considering the fact that mobile portability is not feasible in present times; most of the original subscribers are loyal to Spice irrespective of their services. It would have been a ready pool of subscribers with an efficient spectrum. There is something fishy on for sure.

Did anyone make any noise about the regulatory approval? Would we ever see anti competitive clauses?

I have always maintained that GSM services are cartelised. Despite the hype about the “fastest growing mobile telephony business” (bah!) we have the highest tariffs in the world based on the purchasing power parity. There is no point in repeating the statistics and I’d request interested readers to dig in the archives.

Anti Monopoly watchdog MRTPC issued notices to Airtel , Vodafone and Idea Cellular regarding the price increase on the same day! Here is the frigging legal flotsam if you are interested:

The DGIR said this was a Restrictive Trade Practices by the operators as it distorted the competition and recommended to take action against the three operators under section 2(O) read with 33 (1)(D) of the MRTP Act, 1969.

It’s hard to imagine that any action would come out of this. The legal battery of these companies would swing into action and perhaps settle out of court. They would get a mild rap and it would be business as usual.

In the whole scenario, it is the suffering customer who would keep his mouth shut and not rise up and demand that the prices be rolled back and that they get paid back in kind. Sheesh. I have never come across such a mass of people who choose to suffer in silence and let the operators get away with open loot.