Kathmandu, November 22:

The changed political environment in the country appears to have breathed a new life into United Telecom Ltd (UTL). It is planning to start operations in Hetauda and Birgunj in the next two months, followed by Pokhara, Butwal, Biratnagar and Bhairahawa.

“Our strategy is to cover about 15 cities in the next two and a half years,” informs UTL’s chief operating officer (CEO) N R Mokhariwale.

Today UTL claims to have about 80,000 subscribers and adding 5,000 every month.

The Indian promoters till recently had reportedly been refusing to inject any more cash into the telecom venture, set up with an initial investment of Rs 3 billion.

But they have now asked the company to firm up plans for additional investments, running into several billions.

“Things are certainly looking up for UTL now with a more investment friendly environment. Hence the decision of the promoters to put in more money,” says Mokhariwale.

Not very long ago, the company was on the brink of red as it was forced to shut down operations for about 46 days and refrained from giving new connections for almost six months beginning February 2005. Daily losses had amounted to about Rs 1.5 million.

In sharp contrast, the company now clocks a an annual turnover of Rs 500 million. Although UTL manages to be a cash positive company, the CEO concedes it is running into losses.

“If all goes well, we’ll take another two years to become profit-making,” points out Mokhariwale, “The turnaround time for any telecom company, even in India, is seven years. That’s why telecom promoters need to have deep pockets.”

Evidently, it’s been a slow growth for the company in the past with a 80,000 subscribers. Nepal Telecom has a total subscriber base of 500,000 while Spice Nepal (Mero Mobile) launched only last year has 150,000 users.

“You can’t compare us with Spice for they are into cellular services with roaming facility while we are into basic services which includes WLL with license for limited mobility,” argues Mokhariwale.

Moreover, UTL has to make arrangements for importing the CDMA handsets which are not available over the counter. The handsets that cost about Rs 5,000 are given to subscribers at exceptionally low prices and the cost is recovered only over a period of time.