Tata Communications has lined up a capex of $500 million to fuel its business this fiscal, a top company official said.

“We will be investing $500 million to expand our business this fiscal. We will continue to invest to increase our capabilities and market presence in the coming days,” Tata Communications' Chairman Subodh Bhargava said at the company's annual meeting (AGM) here on Friday. The company invested nearly $509 million in 2009-10.

“The company has commissioned additional submarine cable systems and is expanding capacity in the current year, connecting emerging markets in Asia, the Middle East and Africa to meet the increasing bandwidth demand of broadband enterprise and wholesale customers over the next five to eight years,” Mr. Bhargava said.

“We will continue to focus on redefining telecom services for wholesale commodity and low-value operations to partnership-driven and value-enhancing business on expanding network in India. We will grow this year in the international market with services, including telepresence, media and entertainment solutions, ethernet and cloud computing,” he said.

Going forward, Mr. Bhargava said tariffs and margins would remain under pressure in the current year.

“Weakening of the rupee against the dollar or other major foreign currencies may have an adverse effect on our cost of borrowing and consequently may increase our financing costs, which could have a significant adverse impact on our results,” he said.

India's telecom market is growing rapidly and is expected to be worth Rs. 15,852 crore by 2010, contributing 5.6 per cent to the country's gross domestic product (GDP), the company said in its annual report.

“The mobile industry has shown some resilience to the economic downturn. There is some concern on revenue growth as operators face the prospect of fewer new subscribers and a flat to declining average revenue per user (ARPU),” the company said.

More In: Companies | Business