Tata Teleservices earmarks Rs 3,500 crore for expansion

NEW DELHI: Tata Teleservices, the basic services arm of the $8.8 Billion Tata

Group, has earmarked Rs 3,500 crore for expanding its presence in the basic

telephony sector. The investment of Rs 3,500 crore spread over five years will

be partly financed from internal accruals as well as from partners.

The Tatas will finance the bulk of the investment during the first two years.

The company has already signed LoI for 15 circles and plans to roll out services

in the four states of New Delhi, Tamil Nadu, Maharashtra and Gujarat. The

company has been allowed an extension of LoI for Maharashtra, Haryana, Punjab,

Rajasthan and Kerala till October 31, 2001.

The company announced that it is also contemplating to enter the national

long distance sector although it has not been finalized yet.

The Tatas have already invested Rs 1,100 crore in Andhra Pradesh. This year

the state will see another Rs 500 crore investment in expanding its network.

With the fresh investment, the company expects to increase its presence to at

least five other towns.

It has set up only 10 VPTs so far but expects to scale it up to another 500

villages within the next six months.

The company has a total of 85,000 subscribers 50 per cent of whom are

connected wirelessly. Out of this 50 per cent subscribers, 15 per cent have

subscribed to its limited mobility service which they have branded as MobiTel.

Tata Teleservices plans to upgrade its CDMA-based network in Andhra Pradesh

to 3G 1X by the end of this year. If the company is successful in its ability to

provide handsets for its 3G service, the launch of this service could provide a

blow to the GSM operators who are still struggling with the launch of the GRPS

service due to lack of handsets.

Keeping in line with technology development in the converged arena, the Tatas

have also decided to merge its Internet arm with Tata Teleservices so that the

customer interface with the company is complete at one point. This move is

expected to be finalized shortly.