Skycell Communications, one of the two cellphone operators in Chennai, has drawn up plans to add two more switches to accommodate 60,000 subscribers. The expansion will be partially funded by Millicom International Cellular (MIC) SA, which holds a 24.5 per cent stake in Skywell.
Roger F Blott, president, MIC (Asia region), said while his company was keen to fund the expansion, there is no proposal to hike the stake in the Skycell. The growth rates of Skycell and the performance have exceeded expectations and we are committed to expand the capacity, Blott said.
The exact figures are still being worked out and the final decision will be taken in the next board meeting. All shareholders may have to pitch in equally and the debt equity ratio will be maintained at 1:1, he stated.
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Skycells project with an initial cost of Rs 120 crore has a capacity to service 30,000 subscribers. For the proposed expansion, the company hopes to keep costs down, given the fall in prices of equipment in international markets.
The company has a subscriber base of 18,000 with an approximate airtime useage of nearly 90 per cent, said Skycell managing director Diwaker Singh. In fact, in the last few months, Skycell has beaten RPG Cellular with respect to market share. When it started operations in May 1995, Skycell had a market share of 45 per cent. Now it is about 56 per cent and we should close this fiscal year at 62 per cent, Singh said.
Initially, the company had faced some problems as it had underestimated demand. However, all adjustments have been made at the cell sites and now with fine tuning of its network, the traffic has become very predictable. Therefore, the company could now offer better services to its subscribers. Besides, it also offers the largest number of value-added services among cellular operators.
The company is expected to post operating profits after incurring operating expenditure and payment of license fees to the department of telecommunications (DoT).