Pagelink, the Himachal Futuristic Communications Ltd (HFCL)-led paging operator, has set itself a target of 65,000 subscribers in Mumbai by the end of this year. It recently touched an user-base of 50,000 in the city. Pagelink is the brandname of Microwave Communications Ltd (MCL).
MCL is a joint venture between HFCL and Shinawatra group of Thailand. A proposal by Extreme Telecom an affiliate of PortaCom Wireless, a California-based telecom company to take over Shinawatras 40 per cent stake and half of HFCLs equity is pending with the government.
Apart from Mumbai, Pagelink provides services in Delhi, Calcutta, Ahmedabad, Vadodara, Surat and Rajkot, besides Uttar Pradesh (east), Bihar and Orissa. The company has some 90,000 subscribers spread over these cities, which its top brass hope will go up to 150,000 next year.
Deepak Malhotra, managing director, Pagelink said here that the company had recently become the first in the country to install high-speed paging infrastructure in Mumbai based on Flex technology. The technology helps the company to add more subscribers on a single frequency enabling efficient use of spectrum.
Extreme Telecom plans to invest Rs 75 crore in MCL. The investment was proposed at a premium of Rs 120 per share. The investment was to be through purchase of 49 per cent equity of a holding company floated by HFCL to finance its equity in MCL. Together with 44 per cent MCL equity it bought from Shinawatra and NRIs, it will effectively hold 65 per cent equity. The proposal is yet to be cleared by the foreign investment promotion board.
The Rs 75 crore investment will go into the reserves of the paging company and will be used to finance its expansion plans in the seven cities and three circles in which it holds licences. The current shareholding pattern of MCL is: HFCL 56 per cent, Thai telecom major Shinawatra 40 per cent and a non-resident stake of four per cent.
The Extreme Telecom-Shinawatra deal is reportedly worth some Rs 35 crore. This works out to a premium of about Rs 30, the sources added. The 44 per cent holding of Shinawatra and NRIs in MCL together work out to about Rs 11.88 crore on a Rs 27 crore equity.
Under the new shareholding pattern, HFCL will hold 14 per cent directly in MCL. To finance its remaining 42 per cent, HFCL is floating a holding company (unnamed as yet), 49 per cent of which will be sold to Extreme Telecom. This stake (about Rs 5.56 crore) has been sold for Rs 75 crore, sources added.
Sources said the equity sale and recast was being implemented to raise adequate finances for future operations of MCL. Setting up networks in Uttar Pradesh (east), Bihar and Orissa is alone expected to cost about Rs 35 crore. The companys existing operations in seven cities also require considerable investments to sustain expected losses.
