Shyam Telecom launches broadband network in Rajasthan

Shyam Telecom has become the first player in the country to roll out its converged services. Its basic telephony company, Shyam Telelink, has launched its services in Rajasthan under the brand name Rainbow. The launch of the services from August 8 has been a low-keyed affair providing services in the city of Jaipur and 30 villages surrounding it. The Internet and broadband services will be launched on September 4.

Speaking about the services, Rajeev Mehrotra, Chairman, Shyam Telecom Group, "We have the capacity to provide 8 Mbps connectivity on demand. Within eight weeks we have provided services in 30 villages surrounding Jaipur city. We plan to lay fiber across the entire state and take connectivity to each building and be it a private house, government office, or commercial complex. People not only in the villages but also in pockets of Jaipur are happy that we have been able to provide telephone on demand while they have been waiting for years to get connectivity from the government."

The project, at an estimated cost of Rs 1,000 crore, has already seen an investment of Rs 250 crore. The company aims to set up a fibre-optic network of 4,200 km in a phased manner providing connectivity in 63 towns. In the first phase, spanning the next six months, Shyam Telelink will provide connectivity in 15 towns and set up at least 500 Village Public Telephones.

The network has deployed a combination of technologies to cater to the varying needs: CDMA, CorDect and fibre which can also provide ADSL access. While the CDMA-installed base station can provide connectivity in a range of 20 km with speed in the range of 144 kbps, CorDect base stations can provide connectivity in the range of 2 km with speed at 70 kbps. The fibre-optics network has the capability to provide speed at the rate of 8 Mbps. The customer care and billing solution is from Cincom, the US major in the field.

The Group also provides cellular services in Rajasthan under the brand Oasis through its cellular company Hexacom. It has an estimated subscriber base of 30,000 which is 90 per cent of the marketshare in the circle. "We have the lowest capital and operating expenditure while our per subscriber revenues are among the highest in the industry."

Shyam Telelink also plans to provide a bundle of services that would be the order of the day in the converged world. This includes ISDN services, virtual private network, multimedia services, intelligent network services both for corporates and individuals. "There is a general misconception that we are competitors to DTS. The real competition is to the transportation sector. The transport companies, the courier services and the airlines companies will be our competitors when our services will shrink the real world making commuting largely redundant," says Mehrotra. According to Mehrotra such a scenario will become a reality by the end of 2001 when all other backbone networks are in place.

Interestingly, Shyam Telecom has stakes in several dotcoms operating in the B2B space, though no details were made available. Subsequently, the company’s strategy also includes moving into the distribution business also. This would complement the company’s spectrum of servcies that will be delivered through its converged network where the back-end logistics would play a critical role.

There have been media reports recently that Shyam Telecom was planning to raise the authorised capital from Rs 50 crore to Rs 75 crore while the borrowing limit would be raised from Rs 250 crore to Rs 500 crore. However, Mehrotra denied the reoprts and said that the company has not decided on anything.

The Group has also recently undergone a major restructuring exercise wherein all the service companies were merged into the manufacturing unit of Shyam Telecom which is also the parent company. Says Mehrotra, "Earlier the service companies were not profitable but with favorable market conditions all our service companies are debt-free and profitable. We have therefore merged out service companies with the manufacturing unit at the cost price and not at market price allowing our investors to benefit."

After the restructuring, Shyam International (SI) has become a subsidiary of Shyam Telecom. This was done to route investments through SI which is the holding company of the four separate service companies which are Essel Shyam, (VSAT venture); Hexacom (cellular services); Shyam Telelink (basic service), and Shyam AceS (satellite venture).