Interent sevice provider YOU Telecom appears to be the first to throw its hat into the ring: it has planned a Rs. 300 crore outlay for launching services in 14 new cities by the end of 2008, reports DNA. It’s looking at diluting a minority stake for financing its growth plans, and the BS story seems to be something of pitch to investors. The company currently provides services to around 15 lakh customers in 12 cities; by entering new markets like Delhi, Kolkata, Chandigarh and Kochi, it intends to add 5-7 lakh new subscribers. Currently, YOU Telecom claims a 40 percent marketshare in its operating areas, and is targeting a turnover Rs. 250 crore in 3 years.
I find the timing of this story rather interesting – just on the back of the DoT deciding to cancel district level ISP licenses, thus opening up a market for ISPs to expand by acquiring smaller players. In the past, ISPs have expanded by signing distribution agreements with local players, with haven’t always meant good quality service. YOU Telecom is owned by Citigroup, and BCCL (Times Group) had acquired a 5 percent stake in the company.