Aircel plans Rs 1,100 crore investment in Karnataka

Into the second phase of its expansion in Karnataka, telecom operator Aircel will invest Rs 1,100 crore over the next year to set up base stations across the state. Aircel marked its formal entry into the state by launching GSM mobile services in Bangalore on Monday.

Aircel chief operating officer Gurdeep Singh said on the occasion that the company has so far spent Rs 550 crore as start-up investments in Bangalore, and become the ninth cellular operator to start operations in the city.

A late entrant into the state, the Chennai-based firm plans to set up 1,200 new base stations in Karnataka over the next two months, from the 500 base stations it has employed currently to start operations in Bangalore Urban and Rural districts.

“Bangalore has a penetration rate of 78 per cent, and this is indicative of the huge potential the market holds for us. Many overseas markets have penetration rates in the region of 130 per cent or so. Hence, we see huge scope to widen the market further through innovative product launches and value-adds,” Singh said.

Aircel has operations in 11 telecom circles, which include the states of Tamil Nadu, Himachal Pradesh, Jammu & Kashmir, Bihar, Orissa, Assam and Kerala. Last week, Aircel announced plans to invest Rs 500 crore in its first phase of expansion in Kerala. Services in Hyderabad are scheduled to be launched within two weeks, and New Delhi, Mumbai and east and west Uttar Pradesh circles are expected to come under Aircel’s footprint by September this year.

“We expect to close 2009 with a topline of over $1 billion (from about $600 million in 2008), operating in 18 circles in India out of a total of 23 circles,” Singh said. He added that the company, which sponsors the Chennai Super Kings team, is keen to acquire a pan-India presence before the next edition of the Indian Premier League sets in.

With a market share concentrated predominantly in Tamil Nadu, Aircel has a national subscriber base of over 16 million currently.