Tata Teleservices is poised to invest over $1.5 billion (approximately Rs 6,450 crore ) by 2010 for the roll out of its GSM network in the country.
“We will invest about $2 billion (about Rs 8,600 crore) over the next two years for the expansion of our telecom network, of which $1.5 billion will be spent for GSM while the remaining amount go towards the development of the existing CDMA network,” Anil Sardana, managing director, Tata Teleservices, today said.
The company, which currently operates only on the CDMA network, will roll out its GSM services by FY09-end, added Sardana. These funds, however, exclude any kind of investment that the company would require to bid for 3G spectrum.
In March, the Department of Telecommunications (DoT) permitted Tata Teleservices to operate GSM services in nineteen circles under the crossover technology policy through which CDMA operators can run GSM services with the same licence after paying a fee. The company has received spectrum for 6 circles (Tamil Nadu, Karnataka, Kerala, Pondicherry, Andhra Pradesh and Orissa).
The company has a subscriber base of about 27 million and is looking to target the churn in subscribers in the industry for its GSM roll out, Sardana said. “There is 50 per cent churn in the GSM market every year. Therefore, there is a large market segment for us to address.”
The company is eagerly waiting for the roll out of mobile number portability services (expected to be rolled out in the country next year) to avail of the churn advantage in the GSM space, “We highly advocate the mobile number portability service in India,” said Sardana. “This will help us build our customer base,” he added.
Though Sardana ruled out the listing of company in the near future he said that the company would be funded by internal accruals as well as debt. He said, “we will raise funds equally from internal accruals funded by our promoter (Tata Sons ) and debt.”
Tata Teleservices is the second company to acquire the cross over licence after Reliance Communications has already received spectrum to operate services in GSM and is expected to roll out their GSM services by next year
“The main investments are required for passive infrastructure and transmission equipment. Though most of our infrastructure used for CDMA services can be used for GSM as well, however GSM requires more cell cites than CDMA,” said AG Rao, chief technology officer, Tata Teleservices.
Meanwhile, the company is also optimistic about launching its Blackerry services this current quarter through its World Edition 8030. “We have already begun our internal testing, after we clear a few logistical requirements we will launch the service,” said Sardana.
TTSL’s launch of Blackberry services in India was delayed due to security concerns raised by the security agencies. “There is no problem from the government side now, they have laid down that whatever rules apply to the existing operators will be applied to us as well, therefore we can launch our services soon,” he added.
