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To increase subscriber lines -- Hughes Tele working out access network strategy

Our Bureau

CALCUTTA, Sept 18

AS part of its plans to increase the number of its subscriber lines to nearly four lakh by March 2004, Hughes Tele.com (India) Ltd (HTIL) is working out an access network strategy aimed at facilitating high-quality broadband applications.

The idea, according to Mr Deepak V. Dutt, Chief Financial Officer, is to ensure ``last mile connectivity and high-quality broadband links to the customer's premises''. This would help overcome the problem of access faced by users of existing telecom netw orks.

Mr Dutt told newspersons here that HTIL had decided to use Hughes Escorts' VSAT links to provide Internet applications to customers. It has also applied for an all-India Internet Service Provider's licence to ``truly emerge as a convergence company''. Cu rrently, HTIL offers basic telecommunication services in the Maharashtra circle comprising Maharashtra and Goa.

However, it has over 27,000 telephone lines spread across select high-density pockets in Mumbai, Navi Mumbai and Pune. Most of its customers comprise small and medium enterprises (73 per cent), public call offices (17 per cent) and corporates (10 per cen t). The average per line realisation was stated to be Rs 4,025 every month.

With convergence technologies and a broadband data-centric architecture in place, HTIL was gearing up to offer a range of services, including calling cards -- pre-paid as well as post-paid -- toll-free calls, high-speed Internet access, multiple media de livery, call centres and e-commerce, among others.

While conventional voice communications generates almost the entire revenue of the company at present, over a period of time data communications was expected to contribute to about 20 per cent of the overall revenue.

Later, at an informal interface, Mr Dutt said the success of telecom companies in the years ahead would greatly depend on their ability to facilitate access and high bandwidth applications. As such, HTIL's marketing strategy was centred around its broadb and access on offer.

While initially the focus would be on installing high-density multi-fibre grids, low density grids would be installed in a phased manner at a later stage. The total cost of the HTIL project -- that has begun in September 1997 and shall run through March 2004 -- has been pegged at Rs 3,485 crore. Of this, the equity component would comprise Rs 1,553 crore while the balance Rs 1,932 crore would be the debt component.

The promoters of HTIL -- Hughes Electronics Corporation of the US, the Ispat group of India and ALLTELL Corporation of the US -- have already pumped in Rs 667 crore. An equity investment of Rs 137 crore is to be made by them shortly. Its IPO is for Rs 74 9 crore, of which nearly Rs 675 crore has already been raised through the book-building route, leaving Rs 74.92 crore for the net public offer.