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Cellphone provider banks on rural India

– Idea Cellular, India’s second-largest mobile-phone company by value, is targeting rural users to sustain a 25 percent growth in revenue as larger rival Bharti Airtel invests in Africa to shore up sales.

Most of the expansion at Idea, India’s fastest growing wireless-phone company last year, will come from adding subscribers in villages and small towns and increased data usage by customers upgrading to smartphones, Managing Director Himanshu Kapania said.

Billionaire Kumar Mangalam Birla-backed Idea’s strategy to focus on the world’s second-largest mobile-phone market.

With just 40 percent of the nation’s more than 800 million rural residents using mobile phones, Kapania sees ample room for domestic subscriber growth.

“With a population of 1.2 billion, this is one industry which is driven not so much by purchasing power as it is by human population,” Kapania said. “In the next three to four years as the voice business continues to reach its peak, that’s the time the data business will be in the real state of take off.”

Idea has been adding 20 million to 25 million new customers annually and expects the pace to extend for at least two years, he said. Sales at the company climbed 26 percent to $3.5 billionin the year ended March 31.

Share prices of Indian mobile phone companies have fallen after the nation’s Supreme Court in February canceled 122 network operating licenses in connection with a graft probe into the manner the permits were given in 2008.

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