S Tel to invest Rs 700 cr on 3G services

S Tel, one of the latest entrants into the mobile services market in the country, will invest Rs 700 crore on acquisition of the 3G spectrum and the roll out of 3G services in three circles of the country- Himachal Pradesh, Bihar and Jharkhand and Orissa.

The company, a joint venture between Chennai-based Siva Group and Bahrain Telecom, plans to raise Rs 338 crore through a 1:1 debt to equity ratio towards license fee payment for the three circles.

The debt has already been tied up with nationalized banks in the country via a bridge loan and the company is set to meet the timelines stipulated by the Department of Telecom (DoT).

Talking on the company's future investment plans, Shamik Das, chief executive officer, S Tel said, “S Tel will invest approx Rs 360 crore in capital expenditure over the next five years to roll out 3G services in Bihar & Jharkhand, Orissa and Himachal Pradesh. We are presently working out the details for raising this sum and are in talks with potential lenders.”

“Our business strategy is aimed at making benefits of mobility accessible to a large section of society in the six growth circles. Our commitment to consumers is entrenched in our company vision. Despite being a new operator which has launched services in India in the last six months, we had aggressively bid for 3G spectrum and won licenses in three circles”, he added. S Tel views 3G technology as an important element for advancing socio-economic development and bridging the digital divide that exists in certain regions especially where tele-density and internet penetration are low.

“The 3G mobile connectivity has the potential to deliver essential and richer communication services that benefit people at every tier of the society. This technology will enable high-speed data transfer and enhance the user experience with bandwidth heavy services such as live video streaming and many other graphic formats”, Das stated.