Modi Telstra Plans Rs 100cr Network Upgradation

Chief executive officer Simon Beresford-Wylie said the investments will be deployed for upgrading the company's cellular network in Calcutta, besides funding Modi Telstra's initial losses. It has already invested close to Rs 100 crore in its Calcutta-based network.

The company has, meanwhile, downsized its targets and has set a modest target of 20,000 customers by June next year against an earlier figure of 30,000 subscribers.

While the two partners, Modi Corp and Telstra, will bring in most of the funds, the company is also negotiating with Indian and overseas banks to syndicate term loans for the modernisation project.

"The investment will substantially improve our quality of coverage. We are looking at organic growth and plan to instal 12 new base stations in the next 6 months," Wylie said.

 

He felt that cellular telephone operators have to incur initial losses due to the low subscriber base. "Once we reach the critical mass (around 40,000 subscribers for Calcutta), the operations become profitable," he said.

The company currently charges around Rs 7,500 for a hand-set, thus offering huge subsidy of Rs 6,500 per hand-set to its customers.

Moreover, the company's adspend per subscriber comes close to Rs 3,000.