Spice Comm to invest $2.5bln in 2-3 yrs

New Delhi, Sep 4 (UNI) GSM carrier Spice Communications today announced its plans to invest 2.5 billion dollars for further expansion in India, over the next two-three years .

Of the 2.5 billion dollars, around two billion dollars will be invested by the company, 49 per cent owned by Telecom Malaysia, to further enhance its network to 21 circles, while the remaining 500 million dollars will be spent on expanding existing operations in Punjab and Karnataka.

The company had applied for a license for network expansion with the Department of Telecommunications last friday.

In addition, Spice Communications has also applied for domestic long distance and international long distance services.

The expansion programme will be funded through debt and a public offer. An initial public offering by the company will raise 250-300 million dollars by December this year. The process of listing of the shares is expected to be completed by October-end or early November.

The company will go for another IPO to raise up to 350 million dollars and is likely to be completed by December 2008, Modi said adding that it will depend on the market conditions as well as its ability to secure the licenses.

Spice Telecom Vice Chairman Dilip Modi said the company also has plans for rolling out cost effective network, value added offerings, own brand of handsets and organised telecom retailing.

Right now Spice owns 20 retail stores, called 'Hotspot', for selling mobile phones in Delhi and are expecting 70 by March next year.

The present circles of Spice, namely Punjab and Karnataka constitute 12 per cent of the Indian market and the company has shown a signifiacnt rise in its net profits as its operations has shown a significant increase of 40 per cent in the subscriber base.

The Spice has strategic partnerships with premier financial institutions like Ashmore and infrastructure providers such as ZTE for both passive and electronic equipments.

The company registered a net profit of Rs 2 crore during the quarter ended June 2006 while the total revenues was Rs 734 crore.

Total revenues is expected to reach Rs 1000 crore by the end of the next fiscal, Mr Modi said.

UNI DKS RA HT2002