Tata Tele ramps up project cost to Rs 5,400 cr

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TTML has already spent Rs 3,500cr on the project & has covered upto 131 cities.

Tata Teleservices (Maharashtra) Ltd (TTML) has scaled up its capital expenditure by Rs 2,100 crore to Rs 5,400 crore with the expansion of the scope of its project to cover newer areas and services.

The original project cost was pegged at Rs 3,300 crore in August 2003 for deployment of CDMA (code division multiple access) wireless technology in Maharashtra and Goa.

TTML has increased its presence mani-fold from nine cities to 131 cities and towns now since it started deploying CDMA wireless technology for providing mobile and fixed-wireless telecommunications services.

It has already spent Rs 3,500 crore on the CDMA technology project. The increase in project spending is on account of plans to increase coverage to 150 towns, consolidate presence in already covered areas and add newer offerings like data services, TTML officials said.

TTML plans to raise $200 million through issue of foreign currency convertible bonds (FCCBs) to support the raise in capital cost.

This will be the second FCCB issue by the company. In June 2004, it had raised $125 million through the FCCB route. Of this, $50.06 million FCCBs have been converted into equity shares in seven tranches at a price of Rs 24.96 per share. Tata group holding in TTML has reduced to 66.55 per cent from 74.75 per cent at end June 2004.

TTML is a subsidiary of Tata Teleservices Ltd (TTSL). The earlier incarnation of TTML was Hughes Tele.com, which was renamed after the Tata group acquired it in 2003. The technology originally deployed by Hughes was physical landline and wireless in local loop (WLL).

The Tata group changed the focus from wired to wireless and went in for a complete rebuilding of the technology backbone using the CDMA technology. TTSL too has deployed CDMA technology in the 18 other circles it is present in.

TTML officials said the sharp fall in equipment prices since the beginning of 2004 helped the company expand the reach of its CDMA-based mobile and fixed wireless services much wider without a commensurate rise in the project cost. The cost per mobile connectivity has now dropped to Rs 6,000 from a high of Rs 15,000 in 2003.

TTML plans to increase its subscriber base to 29 lakh subscribers by March 31, 2007 from 11.84 lakh subscribers now "" 6.97 lakh in Mumbai and 4.87 lakh in the rest of Maharashtra and Goa.