Ringing in good times
The Financial Express — December 19, 2004

Tata Teleservices Maharashtra (TTML) has been posting good gains on the bourses of late. The stock was at its 52-week low at Rs 14 in March 2004. It has since moved up by 61% to Rs 22.5 on December 17. It has been witnessing huge volumes. In four previous trading sessions, TTML increased by 16.8% from a low of Rs 18.75 recently. Rival player, Bharti Tele-Ventures (BTL), also saw a surge in recent past with a growth of 32.5% since October 2004. A continued increase in cell phone subscription is expected in the country in future.

The unlisted Tata Tele Services (TTSL) was incorporated in 1996 and was the first to launch CDMA services in India. It offers services in Andhra Pradesh, Delhi, Gujarat, Karnataka, Tamil Nadu and Chennai circles, under the Tata lndicom brand. TTML came into being with the acquisition of Hughes Tele.com (India) by the Tata Group in December 2002. TTML provides wired and wireless services in the Maharashtra circle also, under the Tata Indicom brand.

Earlier this year, TTSL acquired a universal access service license for 11 new circles i.e. Bihar, Haryana, Himachal Pradesh, Kerala, etc. It has also partnered with players like Motorola, Ericsson, Lucent and ECI Telecom for the deployment of a reliable and technologically advanced network. TTSL’s services include mobile services, fixed wireless phones (FWP), public booths, wireline services, voice portal, roaming, post-paid internet, three-way conferencing, CUG, Wi-Fi internet and data services.

In October 2004, the company repositioned its FWP category by launching Walky, offering benefits like freedom of mobility within premises, high speed internet and in-built speaker. With this, the company is targeting emerging markets and the replacement. Recently, Tata Indicom became the first mobile service provider to launch Push-To-Talk in India. Tata Indicom FWP segment is reported to have registered over 300% growth in customer base since January 2003. The launch of its single rate plan is expected to further boost growth.

A four-member committee has been formed to manage TTSL. The company has expansion plans in 12 circles across the country. Earlier, TTML shareholders approved to increase the borrowing limit from Rs 3,000 crore to Rs 4,000 crore. In June 2004, the company completed an issue of FCCBs aggregating to $125 million. They are convertible into fully paid-up equity shares at the option of the holders. The shareholders have also approved increasing the company’s authorised share capital from Rs 1,600 crore to Rs 2,500 crore.

For the quarter ended September 2004, TTML posted a 12.3% growth in operating profit to Rs 9.1 crore from Rs 8.1 crore in corresponding previous quarter. This is on back of a 39% y-o-y growth in net sales to Rs 204.7 crore. At the same time, total expenditure has shot up by 62% to Rs 225.9 crore. This comprises major outgo on account of network operation costs: Rs 25 crore, interconnect & other access costs: Rs 79.7 crore, administration & other expenses: Rs 87.6 crore and marketing & business promotion expenses: Rs 24 crore.

The company informs that administration & other expenses for September 2004 quarter/half-year period, include Rs 3.9 crore on account of provision for claims made by Department of Telecom (DoT). At the same, other income for the quarter/half year period include Rs 26.8 crore on account of amount credited by DoT out of refund admitted for the excess interest collected by them pursuant to the migration package in 1999-2000. Net loss for the quarter has increased to Rs 105.7 crore from Rs 65.7 crore, last time. This is on back of increased depreciation provision and greater interest outgo of 43% and 82% respectively.