Idea Cellular : What an Idea!



Idea Cellular started as a joint venture company between Aditya Birla group,
AT&T and the Tata Group. Both AT&T and Tata have since stepped out of the
venture. Idea Cellular has over 40 mn subscribers spread across Delhi,
Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh,
Uttaranchal, Haryana, UP-West, Himachal Pradesh and Kerala. Idea currently
covers about 45% of Indias population, and plans to start operations in Mumbai
and Bihar.

The Challenges
Idea went through a series of mergers and acquisitions including the recent
one of Spices cellular business. Talking about the challenges on the IT front,
Prakash Paranjape, CIO, Idea Cellular says Over the period, Idea Cellular has
grown through a series of mergers & acquisitions. In the initial phase, we had
disparate systems and processes which were barely serving the needs of the
business at that point of time. Our overall IT infrastructure had to be made
scalable to the service, and drive the growth over a longer period of time.
Also, forward looking systems and processes had to be built and rationalized in
all parts of the business.

Another recent challenge Idea encountered was when it chose to acquire Spice
Telecom that had operations in Punjab and Karnataka. According to Prakash
Paranjape, Our aim is to integrate the IT infrastructure in the two circles of
Karnataka and Punjab, which we have acquired from Spice, with the Idea network.
Most vital is the integration of solutions deployed on this infrastructure with
core Idea systems, in the shortest possible time. He is confident that
integration of IT infrastructure will be done in the stipulated time frame.

In fact, in a separate eight year deal (worth $19.2 mn) announced recently,
IBM will integrate, transition and migrate existing Spice applications,
hardware, packages and products to the Ideas transformed applications platform.
IBM will manage all IT operations and services for Ideas business in Punjab and
Karnataka besides migrating the IT help desk services to its centralized help
desk in Pune.

Key Advantages
  • Entering into a ten year deal with IBM
    termed as business transformation pact. The mandate to IBM was to
    integrate, innovate and transform Ideas business processes and IT
    infrastructure
  • IBM will manage all IT operations and
    services for Ideas business in Punjab and Karnataka besides migrating the
    IT help desk services to its centralized help desk in Pune
  • For billing, it has partnered with Atos
    Origin, while prepaid billing solution is from Bharti Telesoft. Roaming
    solution is from Roamware

Another challenge which the company thinks it will overcome is the existing
partnership which Spice Telecom had with Modi Promoted VAS company Cellebrum,
which was also an in-house provider for the company. While Idea has a VAS tie up
with OnMobile. But Prakash Paranjape does not consider that as a challenge and
says, Idea works with multiple VAS partners, and Cellebrum is one of them.
OnMobile is another valued partner of Idea, so I dont think there is any
challenge for us.

The Idea
Before IBM came on board, Idea Cellular had disparate underlying servers,
storage and very few COTS (Commercial Off-The Shelf) application systems in
fragmented forms in multiple islands. It was this idea to integrate the IT
operations coupled with the sheer size of operations in terms of coverage and
the challenges in managing the explosive growth, the Idea management decided to
go the Airtel way by entering into a ten year deal with IBM termed as business
transformation pact. The mandate to IBM was to integrate, innovate and
transform Ideas business processes and IT infrastructure. IBM is in the process
of designing an innovative risk-reward revenue sharing model, and it covers
Ideas existing operations and potential new additions. The ten year pact,
depending upon Ideas business revenues and circle expansion, would size around
$600 mn to $ 800 mn.

The Partnerships
Apart from IBM, Idea has partnered with some of the leading players in their
own space for providing various value added services. For billing, it has
partnered with Atos Origin, while prepaid billing solution is from Bharti
Telesoft. Roaming solution is from Roamware. On Idea Cellulars overall
strategy, Prakash Paranjape of Idea Cellular says that A robust Information
Technology network is core to Ideas overall business strategy. It underpins
various business transformation initiatives at the company.

Sudesh Prasad
sudeshp@cybermedia.co.in

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