Tata Teleservices is currently offering fixed, mobile and broadband services in 20 circles in 120 cities and has a subscriber base of 4 million customers. This was just 2 million a year ago and most of the addition has been made possible because of the strategic intent and aggression shown by the telco in the last year or so. The Tatas are eying all the spheres of the market and group chairman Ratan Tata will co ordinate and chart out strategy for the growth of various companies under the Tata umbrella within the telecom space.
While in the earlier time Tatas were sitting on the sidelines and waiting for a clear policy decision by the government and seeing how the market pans out, now they have decided to go the CDMA way. They are aggressive about this intent and have emerged as the 6th largest player in the industry and are eying six to seven million subscribers in the next two to three years or so. They have earmarked an investment of 8000 crores for this purpose. This investment would come from a mix of debt and equity which is expected to be in the ratio of 1:1. They have clearly decided their strategy which is based on reaching the maximum number of customers as fast as possible and offering them value services.
They have clearly decided on their strategy of offering value to the customer and this is shown by a number of their offerings that they intend to grow. They were the first to offer a one second pulse in the market when the other players are offering 60 second or 30 second pulse. They have also bundled their offerings well, which in some cases comes to as low as Rs. 1500 for a handset. Another first is the scheme where the customer gets the entire talk time on the card s/he purchases.
They have also rolled out a 1000 true value shops which are retail outlets exclusively for the telco. A hundred and twenty five thousand pay telephones have also been rolled out across the country by the telco.
Though the future looks bright for this company which operates in one of the fastest growing sectors of the country, it is still in the red and therefore difficult to come at a price for the stock of Tata Teleservices. One should keep an eye on the counter and when the price goes down with the corrections in the broader markets one should accumulate the stock. However one needs to keep in mind that the story will play itself out in the longer run and one might have to wait for a couple of years to reap the benefits of the investments that the company is making. Because it will take that much time at least for the investments to translate into profits.
