Escotel To Seek Fi Debt To Part-Fund Expansion

Escotel Mobile Communications Ltd, a joint venture between Escorts and Hong Kong-based First Pacific, would soon approach a domestic financial institution to raise debt for part-financing its Rs 230-crore expansion plan.

"The company would undertake the expansion in two phases, with the investment in the first phase amounting to around Rs 100 crore and the balance being pumped in during 2001-02," Rajiv Burman, chief sales and marketing, said.

"In the current year, the company would borrow from one of the leading Indian financial institution to meet the expansion plan and the borrowing need is expected to be nil in 2000-01 as internal accruals would be sufficient to meet the cost," he said.

 

The entire amount would be channelised for laying down optical fibre backbone, setting up microwave towers and billing and customer care systems, he said.

Escotel, which currently has a 1800-km long independent microwave backbone in the country, had earlier said it would lay down the fibre in areas such as Cochin and Trivandrum where the traffic was high, while continuing on the microwave links in low traffic areas.

Asked about the company's plans to go public to mop-up funds from the market, Burman said the company was currently well-funded and would go for an issue at an appropriate time depending on future requirements. The company recently announced that its customer base had crossed the 200,000 mark, having crossed 100,000 subscribers in October last year.

Escotel, recently entered into an agreement with the Indian Institute of Management, Lucknow (IIM-I) to set up a centre of excellence focusing on customer relationship management (CRM) practices. Under the agreement, Escotel would also fund a "CRM chair" at IIM-I premises and provide the faculty and students with access to Escotel's training, research and ongoing projects.

The agreement also envisages exchange of knowledge between the IIM-I and Escotel in the form of ready access to the latter's offices and customer database for conducting research on CRM-related areas by the IIM-l faculty and research students.