S Tel launch pushed back to early next year

The launch of Batelco's Indian affiliate S Tel has been delayed until next year.

In July, Peter Kaliaropoulos, the CEO of Bahrain's Batelco Group which has a 42.7% stake in the firm said "the launch of full services from S Tel" would happen during the fourth quarter of this year, but on Friday S Tel said it now plans to launch by early 2010, according to a Dow Jones report.

S Tel, which was established to target the fast-growing market where some 15 million new mobile connections are made every month, has licenses to provide services in Bihar, Orissa, Jammu and Kashmir, Himachal Pradesh, North East and Assam. The states have a combined population of some 230 million people and mobile penetration of less than 20%.

With a growing number of operators looking to take advantage of the rapid growth competition has increased and price cuts have taken their toll on the average revenue per user (ARPU).

During the second quarter of 2009 two of India's leading telcos, Reliance Communications and Bharti, saw quarter-on-quarter ARPU fall by 23% and 9% respectively.

S Tel has arranged INR20 billion (US$427 million) to fund its operations, with equity capital of INR12.53 billion brought in by S Tel's founders, Siva Group of India and Batelco, together with a nine-year loan of INR9.53 billion recently agreed with a consortium of eight banks.