Telcos plan $8 B expansion

By agencies   |   Friday, 21 July 2006, 07:00 Hrs
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MUMBAI: Indian telecom companies have planned a strategic capital expenditure for the year 2006.

Posting the figure at $7.8 billion in 2006, with an aggressive and competitive market tending to the telecom needs of an ever-growing population, the capex target is up 20 percent to increase the current population coverage of 70 percent to 100 percent.

Government-funded Bharat Sanchar Nigam Ltd (BSNL) tops the list with a capex target of $3 billion for its expansion followed by Bharti with $2 billion and Hutch Essar with $1.2-1.3 billion.

The direct result of the government policy and the gung ho market, in India has been an aggressive approach from carriers to expand coverage. Everybody is in a capex mode, say analysts, adding that the tier-III and tier-IV cities are opening up for telecom market. Certain players who already exist in a particular circle would want to increase their presence and the players who want to start operation in new circle.

According to reports, Idea is targeting a rise in capex of 80 percent at least and also expecting to see $500million of sales or upwards in 2006, rising from $300million last fiscal. But everything depends on spectrum. The quality of service needs attention. Spectrum is the raw material and again it is scarce.

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