Calcutta, Nov. 7: STel, a joint venture between Bahrain Telecom and the Siva group, plans to start rolling out GSM services in India during the fourth quarter of the current financial year.

The company has licences for the Himachal Pradesh, Orissa, Bihar, Jharkhand, Jammu and Kashmir and Assam circles.

The company is raising funds worth Rs 2,000 crore. In a statement, the company said its promoters had already brought in an equity capital of Rs 1,253 crore.

The remaining amount will come from eight public sector banks, led by IDBI.

The other lenders in the consortium are the State Bank of India, Canara Bank, Punjab National Bank, Central Bank of India, the Union Bank of India, Allahabad Bank and Bank of Baroda.

The funds will be used over two to three years.

“With the successful financial closure, we are set to launch our services in six circles over the current year and early next year,” STel CEO Shamik Das said in a statement.

The company is also pursuing opportunities in the 16 other circles but did not divulge any information as the matter was sub-judice, the statement said.

STel had applied for licences in all the 22 circles and the department of telecom (DoT) had announced September 25, 2007 as the cutoff date for granting licences with some conditions.

STel was granted a licence for only six circles.

STel had later challenged this in Delhi High Court, which had quashed the DoT notification.

The DoT has since referred the matter to the telecom regulator.

STel is looking at the option of participating in the forthcoming auction for 3G spectrum.

“Our board will soon take a decision on this,” the statement said.

Batelco has a 49 per cent stake in STel and the Siva group holds 51 per cent.

STel has tied up with the Tatas, Reliance, Bharti and Quippo for towers and has outsourced IT operations.

IDBI Bank executive director and group head (corporate banking) B. K. Batra said, “We understand that Category C telecom circles have high-potential for connecting large masses of India while also making business sense due to a huge untapped, less penetrated market.”

“The funds will be used over a period of two-to-three years for fuelling growth of STel’s business,” the statement said. S Tel has closed the funding in less than six months of initiating the process.

S Tel is a greenfield operator targeting category C circles.

Siva Group is a $3 billion group with diversified business interests in verticals such as wind energy, shipping and logistics, hospitality and realty, media, EPC, education and agro business.

Bahrain’s Batelco is a diversified, integrated telecommunications operator with mobile, fixed and wireless broadband, datacom and fixed line services.