India Aims to Raise Phone Density With Mobile Service
--From AOL. Some limited sub data.-- Cooters
New Delhi, Feb. 7 (Bloomberg) -- India may revise its targets for telephone density, or phones per 100 people, as state-run companies start providing mobile phone services at rates lower than those offered by private companies in some regions.
State-owned Mahanagar Telephone Nigam Ltd., India's No. 2 fixed-line phone company, unveiled its mobile phone service in New Delhi today. It will activate 10,000 connections tomorrow as it enters new business to boost sales and profit.
The country's largest fixed-line phone company, Bharat Sanchar Nigam Ltd., is also expected to start its 1.6 million-line mobile phone service by the end of this year. Bharat Sanchar is likely to offer rates lower than private operators forcing them to cut tariffs, encouraging greater mobile usage.
``Cellular services are growing at a much faster rate than fixed lines,'' said Shyamal Ghosh, secretary at the ministry of communications, at a news conference. ``We see a quantum jump in cellular subscribers. Not only will we reach the tele-density target of seven (by 2005) but we are proposing raising it to 10.''
The government in the last decade has simplified rules, cut bureaucratic hurdles and allowed foreign equity investment in a bid to boost phone usage, which now stands at three per 100.
``If the telecom sector continues to see the kind of patronage we've seen in the past few years from the government and investors, this kind of growth is possible,'' said Sanjay Chhabaria, an analyst with SMIFS Securities in Mumbai.
India has 3 million mobile subscribers, or about one-tenth the number of fixed-line connections, at present. The number is likely to reach 11 million by 2004, according to Dresdner Kleinwort Benson.
Two Networks
Companies such as Sterling Cellular Ltd., in which Hutchison Whampoa Ltd. has a controlling stake, and Bharti Cellular Ltd., cut rates last week after Mahanagar Telephone Nigam Ltd., or MTNL, announced it will offer services at almost half their rates.
``The public will thank us for bringing down tariffs,'' said Narinder Sharma, chairman and managing director at MTNL. ``They can show their appreciation by taking our service.''
MTNL runs a network of about 4 million fixed-line phones in New Delhi, the capital, and Mumbai, the financial center. It is targeting between 60,000 and 100,000 mobile subscribers in the capital in the first year, 225,000 users by the end of the second year and 400,000 by the end of the third year.
It expects to start its service in Mumbai by Feb. 28, where also it is targeting a customer base of 100,000 in the first year.
GSM Network
The company spent 800 million rupees ($17.2 million) on its 100,000-line Global System for Mobile communications, or GSM, network in New Delhi, said J.M. Mishra, chief general manager for mobile services at the company. Lucent Technologies Inc. supplied the equipment.
The company hopes to make 1,000 rupees per user every month and expects the service to turn a profit after 12 months.
MTNL also runs another mobile service in New Delhi with fewer features and limited range that uses the so-called Code Division Multiple Access, or CDMA, technology. That network has about 10,000 subscribers at present.
The company is planning to expand the network to 50,000 users each in Delhi and Mumbai. ``We will introduce the CDMA network in Mumbai by April,'' said Sharma.
Earlier this month, the Indian government permitted fixed- line operators like MTNL to offer limited-range mobile services at local call rates of 1.20 rupees for three-minute calls, or about a sixth of standard cellular phone charges.
With two kinds of mobile networks, MTNL is hedging its bets.
``We are now the only company offering all three -- fixed- line, GSM and CDMA -- services,'' said Sharma.
The company plans to convert its global depositary receipts to American depositary shares and list them on the New York Stock Exchange soon.
``We are still waiting for clearances from the Securities and Exchange Commission,'' the U.S. market regulator, said Sharma.
Feb/07/2001 8:49 ET |
