The country?s sixth largest telecom operator, Tata Teleservices, on Tuesday announced that it would be advancing its investment plans of infusing $1-billion in its GSM network. This fund would be used partially for expansion of its 2G network and partially for participating in the 3G spectrum auction.
The company had earlier outlined a $2 billion capex plan over a period of two years for its GSM as well as CDMA services. However, now the said amount would be raised within a year.
?We have advanced our capex plan. We will soon approach our shareholders for raising $1 billion to fund our 2G network expansion plans. Some of it will also go towards participating in the 3G auction,? Anil Sardana, managing director TTSL, said on Tuesday.
Explaining the rationale for advancing the capex plan, Sardana said, ?Since the government has stopped allotting additional 2G spectrum beyond a point we have had to revise our capex estimates to sustain our subscriber growth and now that the 3G auction is just three months away, we need to start preparing for it?.
The company, which announced its GSM foray last year, diluted its 26% stake to Japanese telecom operator NTT DoCoMo for $2.7 billion, Tata Teleservices is valued at $10.38 billion.
Tata DoCoMo, as the GSM services are known, has received licences to operate telecom services in the country’s 22 telecom circles but so far has been allocated spectrum only in 18 of them. It ia awaiting spectrum allocation for Assam, north east, Jammu & Kashmir and Delhi circles.
To give a push to its GSM foray, the company plans to launch its GSM handset with bundled talk-time starting from Rs 900 in rural areas.
NTT DoCoMo has around 50% of the Japanese subscriber market and commands average revenue per user of around $25.
Ironically, NTT DoCoMo, which is drawing as much as 40% of its revenue from data services and has a 3G penetration of around 90% in the Japanese telecom market, isn?t planning to follow this model in India at this point of time.