Idea lines up Rs 8,000-cr capex for FY09

MUMBAI: Idea Cellular will invest Rs 8,000 crore ($1.6 billion) in expanding operations during the current fiscal in spite of the gloomy economic scenario at home. ���Our capital expenditure (capex) for the current fiscal is pegged at Rs 7,500-Rs 8,000 crore, excluding 3G investments. It does not include capex for Indus Towers and for the Punjab and Karnataka circles as well,��� Idea Cellular MD Sanjeev Aga said during an earnings conference call on Tuesday.

Indus Towers is the joint venture between Idea, Bharti Airtel and Vodafone Essar set up for the purpose of providing passive infrastructure services. Punjab and Karnataka came into the company���s fold following the acquisition of Spice Communications.

The Aditya Birla Group company is targeting a network of about 42,000 towers by the end of this financial year. This excludes towers in Orissa and Tamil Nadu, where the company expects to launch operations in the next six months. As on September 30, Idea had 33,377 towers.

The stock closed at Rs 54.05, down 12.54%, on BSE on Tuesday. The company hopes to complete the acquisition of Spice before the year-end. ���The merger of Spice with the company will be concluded in October-November. We will start consolidating Spice���s financials after the December quarter,��� Idea CFO Akshay Moondra said.

Idea has completed the issue of 14.99% preferential equity to Telekom Malaysia. The open offer to Spice shareholders closed on October 6. ���Effectively, Spice is now a JV between Idea and Telekom Malaysia. Idea, along with Spice, would have a national spectrum profile, which is as good as the best and better than the average,��� Mr Aga said.

���We will undertake a rebranding exercise in Spice circles,��� he added. Idea, which operates in 12 circles, is investing heavily in branding and advertising. It spent Rs 328 crore during the April-June quarter on subscriber acquisition, advertisement and business promotion.

���We expect branding expenses in the third and fourth quarter to be lower than the second quarter but more than the first quarter,��� said Mr Moondra.