The management of Idea Cellular in its conference call has indicated that any further pricing pressure in near-term would lead to faster than expected consolidation.
Idea stated that revenue growth from recharge fee (due to migration of existing subs to lower price points) is lower than average revenue growth and hence was not significant contributor to 3Q revenue.
Idea mgmt expects to benefit from economies of scale/lower accesscharges etc., considering that it is a pan-India operator it is not sure if this will lead to margin improvements in the near term given the intense competitive environment.
Idea cellular CEO reduced its FY10 capex guidance by 11% as
it had adequate capacity on its network and the minutes did not increase as originally budgeted. Idea believes without 3G investments, 2G capex would be significantly lower going forward.