Spice expects spectrum policy in 2-3 months

New Delhi, June 24: Telecom operator Spice Communications expects the spectrum policy to come up in the second half of this year, paving the way for its roll-out in 21 circles pending since August last year.

Spice, operating in Punjab and Karnataka, had applied for mobile service licenses in 21 more areas across the country.

''In the next two-three months, we should be able to get good news from the government regarding spectrum allocation.

We expect our investments to be reflected in our network growth,'' Spice Communications Managing Director told reporters.

The Telecom Regulatory Authority of India (TRAI) has discussed many issues at its recent meeting, he said. ''We hope some concrete decision to come out soon on the licensing policy.'' The company is the second largest player in Punjab with a subscriber base of two million at the end of May, lagging only to Bharti with 2.7 million subscribers.

''We will mop up Rs 650 crore from this issue including our pre-IPO placement of Rs 112 crore. The proceed will be used mainly to expand our base in Punjab and Karnataka to compete with the number one player already operating there,'' he said.

On a possible consolidation after its merger deal with Idea collapsed, Mr Das said, ''Consolidation is not unknown in the telecom sector, as mergers and acquisitions are taking place globally. This will help consumers access to wide range of services at competitive prices.'' As far as the spectrum-sharing is concerned, ''existing operators have to be serviced first''.

''We are not focused on a pan-India performance rather consolidate our position in the markets we are already in.

The money raised would also be used to repay debt, pay for licences and for capital expenditure and business expansion, he added.

The B K Modi Group owns 51 per cent stake in Spice, while Telekom Malaysia holds the remaining. Post-IPO, Telekom Malaysia will dilute 10 per cent of its holding to 39 per cent and the Modis to 41 per cent. The company aims at expanding its distribution network to grow its customer base and focus on providing new services such as NLD/ILD and VAS.

''We want to be a strong player by 2010. We will introduce more value added services (VAS), enhance distribution network to increase our market share,'' Mr Das said.

The company has received a Letter of Intent (LoI) from the Government for a NLD/ILD license. Spice wants to look beyond Punjab and Karnataka leveraging its partnership with Telekom Malaysia, he said.

At present, Spice Communications operates in 239 towns in Punjab of the total 750 towns. ''We want to cover 700 towns, as our closest competitor... We want to cover more in the North and South. Our game plan will be focussed on Punjab and Karnataka.

The NLD and ILD license is a good pointer in this direction.'' Spice holds a 28 per cent market share in the GSM market in the two states with 20,000 outlets and 150 distributors.

The company has a subscriber base of three million in Karnataka, while Bharti has 7.4 million subscribers in the state.

UNI