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Wednesday, Mar 13, 2002

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Spice Telecom to spice up its act -- Plans Rs 50-cr expansion

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SPICE Telecom, one of the two mobile phone service operators in Karnataka, will be investing Rs 50 crore this year to expand its infrastructure. It also hopes to double its present subscriber base of 1.5 lakh in the next two years and sharpen its focus on its niche regional base through better services.

The plan comes in the wake of the intense competition among the four cellular operators. Besides, Bharti and Spice, Max and BSNL have joined the fray to tap the Karnataka market which has witnessed a vibrant growth in the last three years.

Bharti Mobile which operates the AirTel service and Spice Telecom together account for more than four lakh subscribers in the State.

BSNL, which launched its service last year, has yet to notch up its customer base. Max, the new licensee, is yet to roll out its operations.

Spice Telecom, which has been riding on the back of prepaid service to build up its business, is planning to give a thrust to the post-paid stream.

``We will take a look at expanding our post-paid customer base. But we will balance it to see that it does not affect our pre-paid base,'' said Mr Sean Dexter, Managing Director of Spice Telecom.

Mr Dexter told Business Line that the additional investment of Rs 50 crore would be made from internal accruals and be used to add 40 cell sites to the existing 140 or more to improve the coverage range and instal modern switches to cope with the higher number of subscribers.

On more players entering the mobile phone service arena, Mr Dexter said, ``competition is always good''.

He, however, felt that with the regulatory system also playing a greater role in ironing out any unequal competition, the telecom industry was expected to see a rapid growth.

Spice's regional focus of its business, however, will not preclude its association with any telecom player from outside the State seeking its backbone facility for carrier service of long distance telephony service.

Spice will be studying the opportunities from more than half a dozen telecom companies vying for market space in both

mobile and fixed line services in the State.

Players such as Tata Tele Services, which has almost the entire gamut of communications service under its belt, is a key operator in Maharashtra (Batata), Andhra Pradesh (mobile and basic services) and Karnataka (basic services), apart from being an ISP. Max (Orange) and Reliance are the other major companies slated to enter the Karnataka market soon.

``We will have to weigh the benefits in terms of price and bottomline, while leveraging the potential business from bandwidth leasing and offering carrier facility,'' Mr Dexter said.

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