JT Mobiles has decided to go in for the credit sanctioned a year-and-a-half ago by a consortium led by Industrial Development Bank of India (IDBI) following the recent government announcement allowing revenue sharing in the industry, KS Reddy, president of the company, told PTI here.

JT Mobiles, which offers cellular service in the southern states of Andhra Pradesh and Karnataka, has been hesitant to avail the loan due to uncertainty in the sector and financial non-viability of projects in the licence fee system.

Reddy said the credit will be availed immediately for network expansion in the two states, where the company is planning to expand services to 100 towns up to mandal levels.

The financial institution consortium include Industrial Finance Corporation of India(IFCI) and State Bank of India (SBI), besides Industrial Development Bank of India (IDBI).

Even after the Rs 340-crore credit, the company would be left with an option of another Rs 260 crore debt since it has a equity of over Rs 600 crore. "We will go in for more debts," Reddy added.

On leasing fibre optic network to increase communication capacity, he said talks with railways and NTPC have been going on for strengthening its backbone.

Reddy said the fibre optic network of railways and NTPC would help the company to have a corridor of its own extending from the northern most village in Andhra Pradesh namely Ichchapuram to near Kasargode in Kerala.The company currently offers service in 13 cities and towns in both the states.

Reddy said JT mobile has paid Rs 530 crore licence fee to the government during the last three years of operation, which he said worked out to be over Rs 60 lakh a day.

The operational expenses of the company was to the tune of Rs 40 crore an year, while the cash flow was Rs 30crore per year. "It means we have left with just 10 crore for fresh capital investment in the project," he added.

Most of the equity has been used to pay up the licence fee leaving just about Rs 190 crore for capital investment during its existence, he said.On bringing in equity to do a quick turnaround, he said the company did not need fresh stakes, although the promoters were ready to invest more in the project.

JT Mobiles came to the limelight after it failed to comply with the directive of former communications minister Jagmohan to pay 20 per cent of the total dues by February 28 last. However, Department of Telecom (DoT) encashed the bank guarantees worth Rs 217 crore later.