GTL to Foray into 3G

by Sonal Desai    Apr 26, 2007

Network services provider, GTL is planning a foray in the 3G spectrum.

The company is considering acquisitions to expand expertise into the space, and is also hiving off its IT services department, to focus on core businesses.

Manoj Tirodkar, GTL CMD, says, “We may get into acquisitions on the lines of network and infrastructure management. We have earmarked Rs.1,000 crore for these acquisitions. Since India is largely into deployments, we are exploring the scope of the market here and want to focus on planning, design, network operations and maintenance (O&M). Many service providers are outsourcing network management. Besides, 3G, these would be our focus areas for the next two years.”

On the acquisitions, he informs that there are non binding offers from companies in Europe, US and APAC. GTL is evaluating these companies. A decision would be taken shortly and announcements will follow.

In the 3G space, it has plans to drive about 20-25 % revenues from planning and design and about the same percentage from O&M.

On reasons for hiving off IT servies, S.K. Roy, deputy chief operating officer discloses, we want to expand our network services across geographies, we want to address this opportunity and growth.”

To a query on who would the IT services be outsourced to, he replies, “Though we cannot disclose more details, the deal would be announced once we have signed the dotted line and the transaction is complete. We are talking to some reputed companies who have expertise in this field. These are domestic as well as global companies.”

He remarks, “Telecom sector in India is witnessing tremendous growth. 3G is happening. We have the skills, customer network and processes, and we want to build up on these resources.”

Tirdokar says that GTL estimates the value of outsourcing its IT services to be between Rs.150 to Rs.200 crore. Roy adds that the IT vendor will also have to imbibe GTL’s current IT team, as a part of the outsourcing contract.

GTL’s announcement to enter the 3G arena could not have come at a better time, when the Indian government has in principle accepted TRAI recommendations, decided to auction 3G spectrum and invite even global players to offer services in this space.

On the future roadmap, Roy states that the company will continue to fill-up its order book with Indian clients, but would simultaneously increase its reach abroad.

It also wants to increase contribution from high margin segments like network planning and design and O&M, and is eagerly waiting to bid for the Rs.400 crore BSNL tender to roll out networks for GSM.

Tirodkar offers, “Besides services, planning and design and O&M, we would also like to focus into application maintenance space and professional services.”

Reliance, Ericsson and Nokia were three major clients among others that GTL bagged for network services management in the last one year.

The company will also leverage on the expertise of its sister concern GIL -that is providing back-end services to companies such as Bharati Airtel, Idea, and Hutch for business opportunities in network management.

Tirodkar affirms, “We expect 40 per cent of our revenues to come from GIL, and the rest will be from other customers.”