Escorts’ telecoms units on expansion trail

17 Mar 2003

Indian cellular operator Escotel Mobile Communications has revealed plans to invest INR2 billion (USD42 million) in the financial year beginning 1 April to increase network capacity. Escotel, a 51/49 joint venture between domestic engineering firm Escorts Ltd and Hong Kong’s First Pacific, operates mobile networks in the B circle licensing areas of Haryana, Uttar Pradesh (West) and Kerala. The cellco is keen to increase its market share and take advantage of the widely predicted boom in the Indian telecoms market; as it stands Escotel has 577,850 subscribers out of a total market of 11.7 million.

In a separate manoeuvre Escorts Telecom, another unit of Escorts Ltd, aims to raise USD150 million in debt and equity to build out networks in three states. Escorts Telecom won concessions to operate in Punjab, Rajasthan, Himachal Pradesh and Uttar Pradesh (East) in 2001, but subsequently sold its Punjab licence to a local unit of Hutchison Whampoa; the pair are awaiting approval from the Department of Telecommunications (DoT) to officially transfer ownership. As part of its bid to generate capital Escorts Ltd may sell up to 30% of Escorts Telecom, which it hopes would raise around USD40 million. International Finance Corp, the private lending arm of the World Bank, has said it will buy a stake in the telco but a price has yet to be fixed. Escorts Telecom aims to launch services in the three regions within seven months of finalising the finance.