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August 2, 2001
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Money > Business Headlines > Report August 2, 2001 |
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Escorts floats arm for new circlesThomas K Thomas The Escorts Group has floated another cellular company Escorts Telecom Ltd to rollout services in the four new circles it bagged in the fourth operators bidding. For ETL, which is a 100 per cent subsidiary, Escorts is scouting for a joint venture partner to whom 49 per cent stake in the company can be diluted. The joint venture partner in ETL may also pick up 49 per cent stake in Escotel Mobile Communication Ltd which is a 51:49 joint venture between Escorts and Hong Kong-based First Pacific Company Ltd, offering cellular services in Kerala, Haryana and Uttar Pradesh (west) circles. First Pacific Company has indicated its inability to fund Escotel's expansion in India as it has already committed more than a billion dollars in other Asian markets like the Philippines and Mauritius. Manoj Kohli, chief executive officer of Escotel told Business Standard: "Escorts is currently in talks with 3-4 strategic partners from Europe and Asia, who are interested in Indian market. It is expected that the new strategic partner would be finalised by September and inducted into ETL. Thereafter depending upon the interest of the new partner, as well as strategies of First Pacific Company, the new partner may also be inducted to Escotel". Escorts which bagged Punjab, Uttar Pradesh (east), Rajasthan and Himachal Pradesh for Rs 2.30 billion, will invest close to Rs 10 billion in the next three years for setting up the infrastructure and expanding service. Of this, the company will pump in Rs 500 as equity and raise another Rs 5 billion as debt. After bagging these new licences Escorts has emerged as the fourth largest player in the country after BPL-Batata, Bharti and Essar-Hutchison. "With the acquisition of the four new circles, our footprint will be increased to 310 million population in Northern India of which the target market will be about 40 million by 2009. We will be the second strong player in these new circles and aim to garner 50 per cent revenue share in all these new circles in two years," Kohli said He added that Escorts is targeting close to 900,000 customers in the four new circles by 2005 and another 1.9 million subscribers in the existing three circles of Uttar Pradesh (west), Haryana and Kerala. These three circles will continue to operate under Escotel Mobile Communications Ltd. Powered by YOU MAY ALSO WANT TO READ:
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