India's Hughes Tele says has cash for investments
NEW DELHI, March 8 (Reuters) - Private-sector Indian telecoms company Hughes Tele.com said on Friday it could generate enough cash to fund future investments, dispelling fears that an aborted merger with unlisted Tata Teleservices would hurt growth.
The company, a money-losing unit of U.S.-based Hughes Network Systems (HNS), offers fixed-line telephone and broadband services in the western Indian provinces of Maharashtra and Goa.
Pradman Kaul, chairman and CEO of HNS, a unit of U.S. satellite television giant Hughes Electronic Corp <GMH.N>, told reporters that an expanding customer base would improve Hughes Tele.com's <HTIL.BO> finances.
"The break-up hasn't hit our plans... (The business) should generate enough cash to fund its own investments," Kaul said.
In January, Hughes Tele.com and Tata Teleservices, which operates a fixed-line phone service in the southern Indian state of Andhra Pradesh, called off talks to merge their fixed-line businesses following a disagreement on valuations.
Tata Teleservices, part of the powerful Tata business group, also has rights to start fixed-line services in four other states -- Gujarat, Delhi, Karnataka and Tamil Nadu.
"Right now, our objective is to make the Maharashtra circle successful," Kaul said, referring to the lucrative and industrialised province whose capital is also the nation's main financial centre, Bombay.
Kaul expected the number of fixed-line customers in the province to rise to 150,000 by the end of March, and to 200,000 by end-June. This would help Hughes Tele.com, which is making profits at the operating level, to boost its finances.
Although the company's October-December net loss widened to 373 million rupees, it turned in an operating profit of 70 million rupees for the third quarter, versus an operating loss of 59 million in the year-ago period.
The company has spent more than $300 million to set up its infrastructure in Maharashtra, one of India's most industrialised regions.
SHIFT IN FOCUS
Kaul said Hughes Tele.com had shifted its focus to providing telecom services to individuals from corporates and would aggressively use CDMA wireless in local loop technology to reach out to household customers.
He said Hughes would deploy CDMA by the end of 2002 and estimated each connection would cost around an average of $150.
Though CDMA is a mobile technology, the Indian government has permitted its use by fixed-line phone companies to enable faster rollout of networks.
The Indian government has set a target of boosting phone connections to 100 million by 2005 from around 40 million now, and in the past two years has thrown open most segments of the telecoms business to unlimited competition.
It has also allowed fixed-line phone firms to offer a limited radius mobile service to customers in a bid to make the business more attractive to private players.
Shares of Hughes Tele.com closed flat at 7.45 rupees on the Bombay Exchange, whose main index <.BSESN> ended down 0.91 percent.
06:56 03-08-02 |
