Escotel losses climb to Rs 438 crore

Escotel losses climb to Rs 438 crore
Rupali Mukherjee

New Delhi, August 15: Cellular service provider Escotel Mobile Communications' accumulated losses have risen to Rs 438.21 crore as on March 31, 2000, eroding its net worth of Rs 310 crore.

During the year 1999-2000, Escotel's net loss came down by nearly 28 per cent at Rs 135 crore from Rs 187 crore in 1998-99. Sales and other income, however, nearly doubled to Rs 140 crore during 1999-2000 from Rs 74 crore registered in the previous year.

The company's management is of the view that "The erosion of equity is not unusual in a sizeable infrastructure project during its initial years of operations and various other indicators do not raise any concern in this regard."

Escotel's miscellaneous expenditure (to the extent not written off or adjusted) is to the tune of Rs 29.12 crore as on March 31, 2000.

The company achieved operational profits during 1999-2000, sources said. It hopes to attain a cash break-even at a subscriber base of 2.5 lakh by the end of the current fiscal.

Escotel is planning aggressive roll-outs to consolidate its leadership in the three circles and plans to extend it from the existing 93 towns to 123 towns by October 2000. With the company offering world-class business operations and multiple services, it plans to become a full-fledged telecom company by 2003.

Over the last year, Escotel Mobile Communication Ltd has consolidated its operations in UP (west), Haryana and Kerala. The company's subscriber base will expand to two million with the addition of two to three new circles with a total market share of 72 per cent in these circles. The company has achieved financial closure and has undrawn loan amounts for disbursement. It has also maintained a healthy cash flow consistently and fulfilled all commitments to the government.

During 1999-2000, the company migrated from a fixed licence fee regime to a new revenue-sharing regime offered under the New Telecom Policy 1999. Under the policy, the licence period has also been extended from 10 years to 20 years.

"Both these developments will definitely lead to an accelerated business growth and quicker business viability," sources claimed. Besides emphasising services to subscribers like automatic roaming, closed user groups and public call offices, the company introduced new information services like the Internet to cellular messaging facility, Vet line, crop health advisory.

A new Club Royale has also been introduced for high usage customers which aims at promoting loyalty by giving enhanced and differential customer care services, besides personalised collections and specific promotions.

Hughes Tele.com loss touch Rs 270 cr

MUMBAI: Hughes Tele.com India Ltd, the basic telephone service provider in Goa and Maharashtra circles, has reported a net loss of Rs 269.36 crore during the fiscal ended March 31, 2000.

The company, which is gearing up for a mega maiden public issue within the next couple of weeks, has clocked a total income of Rs 67.01 crore, while the net income from sale of telephone service was Rs 63.81 crore during the last fiscal.

The company has received an interest on deposits of Rs 3.09 crore during the period under review. It spent on network about Rs 83.1 crore and its staff cost was Rs 10.13 crore. Hughes Tele.com kicked off its commercial operations on December 18, 1998.

The company during December 18, 1998, to March 31, 1999, reported a net loss of Rs 63.16 crore on a total income of Rs 4.48 crore. During the period, the company had made provision for depreciation at Rs 14.1 crore. During the fiscal ended March 31, 2000, depreciation was Rs 59.95 crore.