Idea Cellular

Dear Fellow Shareholders,
 
 India continues on its growth trajectory. Since the year 2003-04, our
 GDP growth has exceeded 8% year on year.  Today we can take justifiable
 pride in having joined the ranks of the US$ trillion economies of the
 world. I do believe India will continue its momentum despite some
 strong headwinds. For instance inflation - where the Government is
 trying to pull out all stops to stem it. Additionally we have to
 contend with the hardening interest rates and the volatility in global
 financial markets, consequent to the sub prime crises.
 
 That despite these adverse factors enveloping the business environment,
 India continues to grow is a validation of the inherent fundamental
 strengths of our economy.
 
 The Indian mobility industry is expanding at an aggressive pace, with
 total mobility subscribers at 256 million by March 2008. The reduced
 low cost entry into the sector and expanding coverage remain the growth
 drivers. The wireless penetration level today stands at around 24%. So
 the growth potential is indeed high.
 
 Your Companys performance has been very impressive.  Its consolidated
 revenues stood at Rs. 67,374 million up by 54%. Its net profit at Rs.
 10,423 million reflects a 108% growth.
 
 Let me apprise you of some of the recent developments which position
 your Company into a totally different league.
 
 I am pleased to share with you that your Company is the fastest growing
 telecom service provider in the country with more than 28 million
 customers across 11 operational circles. Your Company has an additional
 10 licenses, of which spectrum has been allotted in Bihar, Orissa and
 Tamil Nadu, which will all be operational before the end of the
 financial year. With the proposed merger of Spice, your Companys
 footprint will then cross 90% of the national mobile telephony market.
 Mumbai has just become the 12th service area to form part of your
 Companys expanding reach.
 
 Other highlights include Idea through its subsidiary becoming one of
 the founder shareholders of the passive infrastructure JV Indus Towers,
 and TMI recently coming in as a significant shareholder. The
 association with TMI will provide synergies in roaming, value-added
 services and other areas. Today your Company boasts of a strong balance
 sheet with a sharply reduced net debt.
 
 Regardless of these heartening developments, your management is deeply
 conscious of the task ahead as the mobile telephony sector changes and
 mutates. To keep in step with the changes in technology and customer
 needs, there are profound stirrings of change in your Company as well.
 We are sharpening our perspective and redesigning the business model.
 
 Currently Idea is among the top 25 telecom companies in the world. We
 expect to step up our position in the foreseeable future.
 
 I believe our people – our human capital is our key resource and we owe
 a large part of our success to them. We have thought leaders across the
 Company. A majority of our people tap into each others knowledge-base
 and collaborate effectively to achieve a shared vision.
 
 The Aditya Birla Group : In Perspective
 
 We are moving in sync with our vision to be a premium global
 conglomerate with a clear focus at each business level. Our Group is
 now a US$ 28 billion meritocratic Corporation, with a market cap in
 excess of US$ 31.5 billion, and a 100,000 strong human capital
 belonging to 25 nationalities, spanning 20 countries across 5
 continents. Our values – Integrity, Commitment, Passion, Seamlessness
 and Speed bind us all together regardless of geographies and
 nationalities.
 
 Our HR strategy ongoingly focuses on enhancing stakeholder value
 through superior organisation and people capability.  Today, more than
 ever before, talent is at a premium, thanks to globalisation and the
 multi-polar world, both of which afford unique opportunities. At our
 Group attracting the best talent and engaging them continues to be a
 key priority. We have made huge investments in not only attracting but
 developing and retaining our human capital over the long-term.
 
 To arrive at an employee proposition that would draw more talent to our
 Group, we conducted an in-depth research aimed at finding out what is
 our DNA as an employer and what does our employer brand connote. Apart
 from trust and admiration for the Group as a professional values-driven
 organisation, what also emerged strikingly was the fact of our
 diversity – the number of countries and businesses in which we are
 engaged, that is an enduring characteristic of our Group.
 
 We have therefore positioned ourselves as an employer that offers “a
 world of opportunities”, other factors being a given in our case. I am
 happy to share with you that our employer brand has attracted more than
 50 top-notch professionals from India and across the globe. To provide
 cross-functional, cross-cultural and cross-country agility and
 learnings, as well as to strengthen our leadership pipeline, more than
 100 colleagues from middle management to senior management have been
 job-rotated.
 
 A Performance Management Centre at our Groups Headquarters has been
 set up with dedicated resources to sharpen our high performance
 culture. This teams sole responsibility is to assist in
 Institutionalising world-class performance framework and leadership
 processes.
 
 As in the past our high-calibre Management talent has been put through
 our Development Assessment Centres and their professional development
 plans drawn up. Gyanodaya, our Institute of Management Learning
 continues to provide a good base for new learnings for our people, and
 honing competencies. Up until now more than 4,500 colleagues have
 participated in its programmes.
 
 We had said last year that we would introduce ESOP schemes during the
 course of the year. In this year, we covered 700 employees under ESOP
 schemes, a significant move, for the first time in the history of our
 Group. We will cover many more from now on.
 
 Going forward in the next five years, I see our workforce mix expanding
 to over 100 nationalities and our senior management team becoming even
 more global. I visualise a multi-generational workforce able to
 overcome generational barriers, and effectively, feeding on each ones
 core offerings of experience, raw energy, risk taking and
 organisational knowledge. Enhancing our attractiveness as an employer
 also calls for creating a workspace that accepts and encourages the
 existence of a sharp sense of individual identity, even within the
 strong organisational brand and cultural fabric. We want to create
 top-notch leaders on virtually an assembly-line scale.  And lastly, we
 want to be in that enviable position where the best talent globally
 wants to join us, just as much as we seek them.
 
 Best regards,
 Kumar Mangalam Birla