The Hindu Business Line : Tata Tele planning major expansion in Maharashtra, Goa

FOLLOWING the migration to the Unified Access (Basic & Cellular) Services Licence (UASL) recently, Tata Teleservices (Maharashtra) Ltd has firmed up major expansion plans for both Maharashtra and Goa.

The company has upwardly revised the project cost by Rs 1,380 crore and is currently negotiating with the lenders for obtaining additional debt funding.

The UASL authorises the company to provide all kinds of fixed as well as mobile services within Maharashtra and Goa. The company currently holds two UASLs - one for Mumbai Metro Area and another for Rest of Maharashtra and Goa.

The company has informed the stock exchanges that it has "drawn up plans for expanding its network and introducing newer service offerings with the objective to garner a sizeable market share, especially in the rapidly growing mobile telephony market segment."

It said that it is currently at an advanced stage of negotiations with various financial institutions and banks within and outside the country for tying up the funds required for the implementation of the expansion plans.

The company reached a major landmark in September last by achieving financial closure for its appraised project.

The project cost was estimated at Rs 3,380 crore, which has been funded by an equity funding of Rs 1,553 crore and debt funding of Rs 1,350 crore, for which the company singed long-term loan agreements with a consortium of 16 banks and financial institutions.

The remaining requirement of Rs 477 crore has been met largely from vendor financing. As at the end of March 2004, the company had spent approximately Rs 3,000 crore on the project.

According to Tata Tele, with an aim to capturing a significant share of the expanding mobile telephony market, it has undertaken expansion of its wireless network to reach 230 cities and have much higher capacity at a total estimated project cost of Rs 4,760 crore.

"The additional funding requirement is being appraised by a group of senior lenders. It is proposed to fund the revised project cost through additional debt and equity."

Keeping in view the debt requirements in the next couple of years, the Tata Tele board has recently decided to enhance the borrowing limits to Rs 4,000 crore from the existing level of Rs 3,000 crore.

The company proposes to obtain the consent of its shareholders at the ensuing general meeting.

It is currently offering wireline services to business and residential subscribers in Mumbai, Navi Mumbai, Pune, Nagpur, Nasik, Kolhapur, Sangli, Goa, Aurangabad and Ahmednagar.

Further, the company said that it has signed UAS licences for 12 new circles. By the end of this year, it would be in a position to offer roaming services in major cities and towns in these circles as well.

"During the current year, the company plans to extend its wireless (fixed and mobile) services to 150 cities and towns, with a presence in every district in Maharashtra and Goa, to extend its network to cover major highways. It also plans to introduce prepaid plans soon."

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