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SkyCell to beef up infrastructure -- Investment pegged at Rs 60 cr

Our Bureau

CHENNAI, Jan. 4

SKYCELL Communications Ltd, one of the cellular operators in Chennai, is investing Rs 60 crore in creating additional infrastructure that will be necessary to service its growing customer base.

Investments on creating the infrastructure (towers, base stations, etc) have begun and would be over by the end of this month, company officials said.

SkyCell has around 40,000 subscribers, which according to officials, would triple in one year. The Rs 60 crore would be raised through borrowings.

At a press conference, the SkyCell Managing Director, Mr P.H. Rao, said that its subscriber base was not large because there had been no investment in the last three years.

Mr Rao and other officials said that there were now two tasks before the operating team, viz., to acquire more customers and to provide better service, with more features.

In response to a question, Mr S. Venkatraman, Chief Financial Officer & Company Secretary, said that it cost the company between Rs 3,500 and Rs 4,000 to get one new customer.

The company spent around five per cent of its revenues on advertisements, the officials said.

SkyCell's monthly billing comes to around Rs 7 crore, on which it makes an operating profit of Rs 3 crore and a cash profit of Rs 75 lakh.

Mr Venkatraman said that it would take two years for the company to wipe out the accumulated losses of about Rs 90 crore.

On improving service and adding new features, Mr Pritam Kukillaya, Chief Technical Officer, said that the call drop rate -- ratio of number of calls that fail to connect to total calls made -- would drop from the current six per cent to (benchmark level of) three per cent by the end of January, when the additional infrastructure would be in place.

While the infrastructure would help improve the regular services, SkyCell, which has recently received the ISO-9001 certification from Underwriters Laboratories, also proposes to introduce features such as mobile banking.

SkyCell introduced WAP facility for the first time in Chennai, enabling cellular users to browse the Internet through their WAP-enabled handsets.

The cellular operator also has made the Madras University examination results available over the cellphone free of cost for subscribers, through the short message service (SMS) platform.

It launched a marketing campaign to get consumers to buy cell phones on New Year's day. About 1,400 subscribers were added on January 1.

Of the 40,000-odd subscribers, 40 per cent belong to the `pre-paid' category, who contribute about 13 per cent of the revenues.

Of the other 60 per cent, around 22 per cent are corporate subscribers.

On the dispute between Crompton Greaves and BellSouth International, two of the four promoters of SkyCell, Mr Rao said that the matter was sub judice and that hearings were going on.

The dispute relates to BellSouth objecting to Crompton Greaves selling its 40.5 per cent stake in SkyCell to Bharati Tele-Ventures, without obtaining its consent.

BellSouth's contention is that such a consent is mandated by the joint venture agreement.

Pic.:Mr S. Venkatraman, CFO, Skycell Communications, Mr P.H. Rao, Managing Director, Mr J. Chandrasekar of UL India, and Mr Pritam Kukillaya, CTO, Skycell, at a press meet in Chennai on Thursday.

Picture by Shaju John