Aircell sets Rs 100 crore for expansion in North

Ahmedabad, January 20: | Updated: Jan 21 2002, 05:30am hrs
The Essar group-promoted Aircell Digilink India Limited (ADIL) has embarked upon a Rs 100-crore expansion for its cellular networks in UP (East), Haryana and Rajasthan. In this regard, the recently formed Essar Teleholdings Limited (ETHL) has signed a Rs 25-crore contract with its vendor Siemens AG for the supply of GSM network equipment for the UP (East) circle.

The company is in advanced stages of negotiations wth Siemens and French equipment supplier Alcatel for finalisation of similar contracts for the Haryana and Rajasthan circles.

When contacted, company officials confirmed the deal with Siemens. It is believed that the contract involves installation and commissioning of system, microwave survey and design, radio planning and training and technical support. Siemens is expected to supply the equipment in two phases latest by February 28 while Siemens Public Commu-nications Network Limited would do the installation.

It is learnt that Aircell is eyeing the lucrative UP (East) market once the Department of Telecommun-ication cancels the licence of market leader Koshika Telecom on account of non-payment of licence fees. In fact, ADIL has been fast gaining ground in the circle and according to market statistics, took its marketshare in the 1,00,000 cellular market from 28 per cent to 42 per cent between June and October 2001. Industry observers see ADIL getting all the 55,000 Koshika subscribers in the state in the event of cancellation of Koshika’s licence.

Speaking to The Financial Express, the CEO of ETHL, the newly-formed holding company for Essar’s holdings in cellular companies, maintained that the UP (East) cellular market has an extremely good growth potential.

‘‘Both our networks (ADIL and Koshika) are in fact currently capacity constrained and we are unable to accept new subscribers. The expansion will allow us to ramp up our subscriber base and marketshare and will also improve network quality coverage." In addition, ADIL is proposing to pump in an additional Rs 15 crore in the circle on local infrastructure to support the expansion which envisages coverage in 44 new towns taking the total investment in the circle to Rs 40 crore.

Furthermore, the company has chalked out a Rs 50-crore expansion plan for Haryana and Rajasthan circles too for additional GSM network equipment and are in talks with Siemens and Alcatel for finalising a vendor.

It may be mentioned that ADIL operates in these three circles under the Essar Cellphone brandname. ADIL is a wholly-owned subsidiary of ETHL.

It may be recalled that as a prelude to the merger of cellular businesses of Hutchison telecom and the Essar Group, the Ruias had recently decided to merge their holdings in five cellular companies into one entity, ETHL.