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Friday, Aug 11, 2006

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BPL Mobile to invest Rs 100 cr on Mumbai operations

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Mumbai , Aug.10

In the midst of the dispute between the Hutch and Essar groups over BPL Mobile, the latter has announced that it will invest Rs 100 crore in expanding its Mumbai operations.

"We will add 300-400 more cell sites over the next four or five months, to our existing count of 580," said Mr S. Subramaniam, Chief Executive Officer, BPL Mobile. "We will also invest in another switch, upgrade our Intelligent Network system for our prepaid platform, renew advertising and start recruiting to fill in existing gaps."

"BPL Mobile is PAT-positive," he added. "The funds will come from internal accruals as well as from vendor credit." Motorola is its vendor for network expansion.

The company was in a state of dormancy as far as investment was concerned for the last eight months in view of the merger that was intended to happen, he said. Over the last two months it lost 10,000 subscribers.

But the first operator advantage remains with BPL, he said. The earlier operators have a higher post-paid to pre-paid customer mix (BPL's is over 25 per cent against the industry average of 15, according to Mr Subramaniam), the higher earning segments having subscribed to mobile services first.

BPL Mobile, whose ultimate majority ownership is with Essar, clearly wants to maintain and augment its asset value even while the dispute over it rages, said sources close to the Essar-Hutch dispute.

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