BSES Telecom plans expanding broadband service to more cities

Neeraj Jha

Mumbai, Aug 31: BSES Telecom Limited, the wholly-owned subsidiary of power major BSES, may take its broadband services to other parts of India as well. Essentially trailing the parent’s foot print, BTL’s possible destinations could include Orissa, Delhi, Pune and Hyderabad. In all these locations, BSES is either present in some form or will soon be. In Orissa, for instance, BSES is into power distribution. Likewise in Delhi, the company is looking for a foothold.

“We’d like to fan out into other areas wherever we can exploit synergy with distribution. But, we’d like to master the business first. So, our priority at the moment is Mumbai,” BSES chairman and managing director RV Shahi told The Financial Express. Mr Shahi added BSES was serious about its telecom foray, as it enjoyed good synergy with power, its core business. BTL had envisaged expanding into these cities earlier also, but had not been doing much about it ever since Reliance came on board. Reliance has broadband plans too, of a much larger scale.

Analysts said fanning out into cities like Delhi may not be a bad idea, but geographies like Orissa would have to be thought over, given the high investments they entail because of population being spread over vast areas and low demand for broadband. In fact, analysts are not too impressed with BTL’s business model. “There is not much demand for broadband retailing in India as of now. Given the stiff competition that it is likely to face, BTL won’t have an easy run. Most certainly not on its own,” said an analyst with a top domestic broking firm. BTL is likely to face competition from Hughes Telecom and Tata Power. Also, possibly with MTNL, which is readying its broadband plans.

Reliance, which is wiring up commercial buildings in Mumbai, is unlikely to cut BTL’s way though. Actually, BTL’s indirect association with Reliance may turn out to be a boon for the latter. “BTL’s best trigger could be Reliance, provided its own business plan could be dovetailed into the latter’s (Reliance Infocom). Reliance may also enhance BTL’s selling might,” said an analyst.

BTL has about 1,000 retail broadband customers and 55 corporate customers in Mumbai. By March 2003, the company hopes to have a customer base of 35,000. The total capex envisaged during the period is Rs 100 crore.