D L F, Indiabulls And Many Others Intend To Enter Into Telecom Sector

[Arun 795]

Indiabulls too joins telecom bandwagon

India Infoline News Service / Mumbai Sep 26, 2007 15:22

The list of new companies seeking a slice of India's fast-growing telecom sector just keeps growing. After Parsvnath Developers and Unitech, another real estate player, Indiabulls Real Estate plans to enter this space.

The company, part of the Indiabulls Group, applied for licences in 22 circles yesterday. The move comes a day after the Department of Telecommunications (DoT) said it won't accept new applications for licenses after October 1.

Meanwhile, newspaper reports also suggest that DLF, India's largest property developer, is also contemplating entering the telecom sector with 7-8 million new subscribers being added by wireless operators every month.

Over the last few weeks, the DoT has received about 160-180 new applications for new universal access service licences and many more could be in the pipeline. However, in view of the paucity of spectrum it may not be possible for the DoT to entertain all the new applicants.

Some say the rush for getting new telecom licences is due to telecom regulator TRAI's latest recommendation that the number of players in a circle should not be capped.

In addition, TRAI has suggested that the current norm of allocating 2G spectrum based on the number of subscribers should be increased several times before existing players are allocated fresh spectrum.

If these recommendations are accepted by the DoT, then several new applicants will be eligible to get spectrum to launch telecom services.

However, some experts are of the view that the scramble for telecom licences is aimed at making a quick buck by first getting the licences and then selling the same to overseas players at a hefty premium.

To get to the bottom of the matter, the DoT is believed to have set up an agency to establish the actual identities of the promoters and shareholders behind the new applications for telecom services.

Telecom Minister, A Raja, on Monday, announced that the ministry will prepare a fresh set of guidelines for grant of licences to new applicants. "I have asked DoT secretary, DS Mathur to form a committee to frame guidelines for grant of licence to new applicants,” Raja said.

DLF planning to enter telecom business

24 Sep, 2007, 1314 hrs IST - Times New Network

The flurry of companies seeking telecom licences seems no sign of ending. ET has learnt that India‘s largest realty firm DLF is also planning to foray into the telecom business. According to sources, DLF is examining two options – applying for universal access service licences in all 22 circles with the department of telecom (DoT) and joining the queue for allocation of spectrum, or buyout any of the existing applicants or operators.

Put simply, after Parsvnath Developers and Unitech, Delhi-based DLF is soon set to be the third real estate player which intends to enter the mobile telephony space. However, when contacted over this issue, the DLF spokesperson refused to comment.

Over the last couple of weeks, close to 180 applications have come in for new universal access service licences and many more are expected to be filed. It was just last week, that India’s second largest realty firm Unitech said it would apply for mobile licences in all 22 telecom circles. “The continuous rapid growth in India’s telephone services business indicates the enormous potential for future growth in this business. Further, it would help boost the group’s telecom and transmission tower manufacturing business,” Unitech said in a statement to NSE.

Although a nation-wide application will cost a company just about Rs 1,700 crore, a pan-India license, if awarded, comes with 2G spectrum, 4.4 MHz in the case of GSM players and 2.5 MHz in the case of CDMA operators. A licence with the initial spectrum is worth several multiples over the Rs 1,700 crore entry fee. Sources say DLF’s decision to venture into full-fledged telecom services could stem from the fact that the country is setting global records every month in subscriber additions . For instance, GSM and CDMA operators combined together added over 8 million new mobile connections last month. Additionally, industry analysts estimate there is further scope for growth as the number of monthly adds is likely to touch the 10-million mark soon.

The rush for licences comes as Trai had recently recommended that there be no cap on the number of operators offering telecom services in a circle. Another factor that has played a major role in the slew of applications is related to 2G spectrum. This is because radio frequencies on which mobile services operate are allocated based on the order of the applicants, or in a first-come-first-serve queue system . If Trai’s proposal, that the subscriber base linked spectrum allocation criteria be hiked several times before existing players are allocated fresh spectrum is accepted by the DoT, then several new applicants in queue will be eligible to get spectrum to launch services.

It must also be noted that with companies making a beeline for new cellular licences, DoT is learnt to have constituted an agency consisting of members from different departments of the government to establish the actual identities of the promoters and shareholders behind the new applications for telecom services.

[@ksh@T 20]

unitech and parsvnath are also in pipeline!

[Arun 795]

and so is Videocon...

Videocon Seeks Indian Phone License, Plans Stake Sale

- Bloomberg

September 27, 2007

Videocon, the Indian company with interests in consumer electronics and oil exploration, applied for a license to sell telecommunications services in the world's fastest-growing major wireless market.

The group will partner with a U.S.-based telecom company to offer mobile-phone services nationwide, Chairman Venugopal Dhoot said in a telephone interview today. The overseas partner will own 26 percent of the planned venture, he said, declining to identify the company.

It is rumoured that the partner company could be AT&T or SingTel.

[Sadikk 301]

Now i wait for stiff competition in VOIP in some days.

Once Voip is out, they will run selling their license

Chalo humlog bhi ek company daal dete hai, WCDMA base provider

[copperco2 24]

Now i wait for stiff competition in VOIP in some days.

Once Voip is out, they will run selling their license

Chalo humlog bhi ek company daal dete hai, WCDMA base provider

[amtrag 20]

Add Omaxe to this list

[Arun 795]

Thats not all... other companies interested in a new telecom license are Infrastructure major Jaypee Group, Kishore Biyani-promoted Future Group and Hinduja TMT is discussing about it as well.

Jaypee Group, Future join the telecom rush

29 Sep, 2007, 0251 hrs IST, Times News Network

New Delhi

The telecom gold-rush has attracted two new names from the sunrise retail and realty sectors.

Infrastructure major Jaypee Group is learnt to have become the latest company to join the rush for mobile licenses across the country. ET has also learnt that Kishore Biyani-promoted Future Group is also planning to apply for nation-wide telecom licenses though the company is yet to take a final call on the issue. When contacted, Kishore Biyani said that the company did not have any plans to foray into the telecom business.

Jaypee Group’s decision to get into telecom comes close on the heels of a host of realty firms venturing into this sector. As reported first by ET, four realty firms have applied for telecom licences in the last couple of weeks — Parsvnath Developers which applied in August was the first, followed by Unitech last week, while Indiabulls and DLF are learnt to have submitted their applications earlier this week.

The Jaypee Group's application comes just days ahead of the October 1 deadline set by the Department of Telecom (DoT) to accept new licenses. Its decision to venture into full-fledged telecom services could stem from the fact that India, which is the world’s fastest growing telecom market, is setting global records every month in terms of subscriber additions.

For instance, GSM and CDMA operators combined together added over 8 million new mobile connections last month. And industry analysts estimate there is further scope for growth as the number of monthly additions is likely to touch the 10 million mark soon.

Over the last couple of weeks close to 200 applications have come in for new universal access service licences (UASL) and many more are expected to be filed before the October 1 deadline expires.

A nation-wide application will cost a company just about Rs 1,700 crore. More importantly, a pan-India license, if awarded, comes with free 2G spectrum – 4.4 MHz in the case of GSM players and 2.5 MHz in the case of CDMA operators.

A licence with the initial spectrum is worth several multiples over the Rs 1,700 crore entry fees.

As companies make a beeline for new cellular licenses, the (DoT) is learnt to have constituted an agency consisting of members from different departments of the government to establish the actual identities of the promoters and the shareholders behind the new applications for telecom services.

[coolrajiv 1]

Source - Times of India epaper

AT&T joins mobile licence rush

DoT In A Tizzy Over 400 Applications; May Delink Licence From Spectrum

Shalini Singh | TNN

New Delhi: Amid the rush for licences to offer telecom services, global giant AT&T entered the game, as it knocked on the government’s door for providing mobile, fixed-phone and broadband connections in India.

AT&T, which has teamed up with Mahindra Telecommunications Pvt Ltd, was among the 150 applicants who approached the department of telecommunications (DoT) on Monday, the last date for submitting applications for Universal Access Services Licences (UASL). DoT now has to deal with over 400 applications and the sheer number of fresh aspirants may become unmanageable.

The US giant, through AT&T India, has become the first major global telecom player to apply for pan-India licences. The company has announced its intent of acquiring a significant footprint in India, a market which it exited after partnering the Birlas during initial years telecom sector liberalisation.

In October 2006, AT&T became the first global telecom operator to secure national and international long distance licences in India, to begin commercial services in early 2007. It owns the largest voice and wireless data network in the US, with nearly 64 million subscribers.

AT&T’s entry into India could make the market more exciting with Vodafone having just acquired Hutchison’s stake to give competition to Bharti Airtel, Reliance, BSNL and Idea. Other applicants include Moser Baer and BPTP Properties, Prithvi Solutions, Next Gen Telecom, Avinija Properties Ltd, Meta Telecommunications Ltd and Sterlite Industries.

With this, over eight real estate firms, apart from several other aspirants from unrelated industries, are now wooing the telecom sector.

The flood of applications is in anticipations of bagging expensive and scarce spectrum at a bargain price of Rs 1,600 crore an entry fee borrowed from as far ago as 2001.

However, a senior DoT official, clearing the air on the prevailing first-come-firstserved policy for allocating licences said, the government reserves the right to modify the methodology for allocation of spectrum based on its availability.

This could come as a rude shock to the bounty hunters queuing up in the hope that pan-India licenses along with spectrum will turn them into billionaires overnight. This is the first authoritative statement from DoT, which could start moving this sector towards sanity.

The source also said that awarding a license did not guarantee spectrum. This is evident from the fact that of 20-22 operators who were given licenses last year, none have been given any spectrum yet, he said.

While the conclusion of the senior officials comments would point towards auctions not just in 3G but also in 2G as an obvious outcome, it remains a matter for telecom minister, A Raja to decide on his return to Delhi on Tuesday. Interestingly, It is learnt that Raja has called a selective meeting of all existing operators on 3rd October and spectrum is expected to feature in the discussions.

Clarifying doubts on the issue of Trai’s stiffening of subscriber-linked criteria, the DoT official said that there was no disagreement between DoT and Trai.

DIALLING DOT: AT&T has become the first major global telecom player to apply for pan-India licences

[Arun 795]

DoT gets 575 applications for mobile licences

11 Oct 2007, 0030 hrs IST - Times News Network

NEW DELHI: At the final count, 46 companies have managed to log in a staggering 575 applications for UAS (mobile) licences with the DoT. This translates into an average of 26 applications for each of the 22 telecom service areas.

The frenzy for licences is fuelled by the fact that spectrum — a precious and scarce national resource for telecom services — comes along with the licence at a throwaway price of Rs 1,660 crore.

The excitement only grew after Trai's August 28 recommendations on licence reforms and spectrum allocation ruled out auctions for 2G spectrum in the 800, 900 and 1800 bands. Almost 80% of the total applications received by DoT (30 companies with 461 applications) came in after this.

Unable to stem the tide, the DoT finally, on September 24, said its doors would close for UASL applications on October 1. However, roughly 20 companies still managed to place applications in the four working days following the announcement. According to the DoT's final list, 15 companies have applied for pan-India licences, while four have applied for between 20 and 21 licences.

The UP (West) circle leads the tally with 29 applications, followed by Orissa and Rajasthan with 28 each and Tamil Nadu, North East, J&K, Haryana, Gujarat and Assam with 27 each. Even Himachal Pradesh and Bihar both C category circles have received 23 and 24 applications respectively. Himachal Pradesh with 23 is the least in demand.

The numbers are perplexing, considering each pan-India green field operation requires a minimum investment of Rs 25,000 crore within the first three years to mount any credible competition for entrenched players. Surprisingly, despite the obvious opportunism on display, Trai and now even telecom minister, A Raja, are reluctant to nudge the industry towards paying the real value of spectrum.

The Rs 1,660 crore offer is a price linked to an auction for the 4th mobile licence held in mid-2001 when India's subscriber base was four million and the overall target less than 100 million.

The stakes are far higher today, with 200 million subscribers and a subscriber target of 500 million by 2011, followed by a slowdown that will peak at nearly 750 million subscribers by 2017. Strangely, Trai has shied away from prescribing auctions despite admitting in its August 28, 2007 (section 2.73) recommendations that the current entry fee is linked to a 2001 transaction and recognizing the need to rediscover its present value.

The ball is now squarely in the Department of Telecom's court. If sanity does not rule, three companies are set to strike gold by getting spectrum worth Rs 15,000 crore or more for a song.

AT&T has partnered Mahindra, India’s largest utility vehicle maker while Verizon, it is learned, has tied up with India’s largest consumer durables maker Videocon.

AT&T was the first foreign player to get permission to offer domestic and international long distance licence last year. India has become a hot property among telecom companies as it not just a fast growing market but also a market that offers immense potential. In contrast China has been adding only five million new connections each month while it has almost reached a point of saturation. For European and American telecom companies, India promises a great reason to expand as places are also saturated.

Among the list of companies that have entered the sector are DLF, Parshvnath, IndiaBulls, Omaxe, Unitech and Jaypee Group that are the largest real estate firms in the country. Among the retailer, it is the Future Griup, currently the largest retailer in India.

What’s even more exciting is the fact for Rs. 1,700 crore (USD 650 million), applicants will get free 2G spectrum with a pan-India mobile licence — 4.4 MHz in the case of GSM players and 2.5 MHz in the case of CDMA operators.

There are already over 60 firms waiting in the pipeline to get permission to launch all India services. Some of them are regional players such as Spice, HFCL, Shyam Telecom, BPL Mobile. India is divided into 22 circles (each state and four metro cities of Delhi, Mumbai, Chennai and Calcutta, classify as a circle or zone.)

Each circle in India currently has seven operators-four GSM and three CDMA. Due to such heavy competition, mobile prices in India are the lowest in the world.

According to DoT (Department of Telecom) officials, permission will be given to the applicants based on first come first serve basis and after screening the antecedents of all applicants.

[@ksh@T 20]

THE SCENARIO IS SURE GOING TO CHANGE! . . .SO KEEP WAITING!

[copperco2 24]

in the case of indiabulls, i see a total lack of business plan regarding their focus areas.

Some time back it got into real estate developement too, that was sheer due to excessive money available to them and perceived in the profits... the same way they are getting into telecom...

[Arun 795]

Telecom — Making sense of the licence rush

The Hindu - Business Line

Sunday, Oct 14, 2007

In the rush to apply for Unified Access Services Licence, telecom players are jostling with competition from the real-estate sector. Here’s taking a look at who might finally call the shots.

300! That isn’t the name of the recently released English movie. It’s the number of new applicants for the UASL (Unified Access Services Licence) telecom licence.

The driving force behind this deluge of applications is the desire to participate in the fastest growing telecom market in the world — India — which is seeing over 7 million mobile telephone subscribers being added every month. Before we categorise and analyse the prospects of the applicants, it must be highlighted that any new player would have to contend with the following:

Although the UAS licence allows provision of the entire gamut of wireless and wireline voice and data services, this rush for licences could be purely by players interested in tapping the mobile telephony market.

For a player who bags the licence, a countrywide (23 service area/circle) UASL entry fee may cost at least Rs 1,400 crore — licences are usually issued through the auction route. In addition, there is an annual fee of 6-10 per cent linked to revenues, as well as spectrum charges of 2-6 per cent of revenues.

Spectrum, the band of airwaves used for communication that is licensed, is scarce and its allocation to operators is based on subscriber numbers and satisfaction of the Department of Telecom’s (DoT’s) stiff service area rollout obligations.

A current countrywide rollout of fresh network is estimated to entail investments of about $1 billion for a normal 2G network. If it is to be an Internet Protocol-based NextGen Network or any advanced technology rollout (EDGE, WCDMA, EVDO, HSDPA or TD-SCDMA), it could be much more. There could be a two-three year timeline involved in a nationwide rollout.

Given the substantial investments as well as staying power involved in a successful telecom foray, we evaluate which among the recent crop of applicants is likely to enjoy success.

Real-estate, telecom synergies ?

Real-estate companies have been the most prominent set of applicants in this particular phase, with DLF, Unitech, and Parsvnath among the key players in the fray. There is speculation that some of these players may be in talks with overseas telecom companies for a joint foray into Indian markets, but nothing is confirmed as yet.

Real-estate players, although they have no previous expertise in running a telecom business, have a few factors favouring them. Most of them have huge land banks to build townships. This could be used to house a part of their tower infrastructure, thus reducing rental costs, a key part of operational expenditure involved in telecom operations.

In this context, players such as DLF, Omaxe and Parsvnath are flush with cash after their successful IPOs as well as other fund-raising over the past couple of years. This might allow them to operate at low or even negative profitability for the first few years of operation, which is inevitable.

But with most of the leading real-estate players having significant land banks in the metros or major cities, the land holdings may not offer any edge to these players in telecom rollouts in rural areas or even tier 2 towns. DLF and Parsvnath have some land banks in these areas and may be able to put part of them for productive telecom usage.

While these players have staying power, a tie-up of such companies with a domestic or international telecom operator could bring in the business expertise required for telecom operations. In that event, the time for the combined entity to roll out operations could also be reduced.

Existing players on firm ground

A good number of existing players from telecom and related businesses, such as Idea Cellular, Spice Communications, Reliance (ADAG), Maxis-Aircel, Tulip IT Services, BPL and Hinduja TMT are also among the prospective applicants. The first four companies have existing operations on a regional/national scale and their applications are directed towards having a wider footprint across India.

Each of these applicants is approaching its foray with a different strategic intent. Idea Cellular, which has operations in 11 service areas, applied for licence to commence operations in Mumbai and Bihar nearly a year ago and is awaiting spectrum allocation. As the company is a leader in the Maharashtra market, this move appears synergistic.

Reliance Communications’ application appears to be a move to expand its GSM footprint. The telecom regulator TRAI (Telecom and Regulatory Authority of India) has, incidentally, allowed a single operator to offer both technologies (CDMA and GSM) within a circle.

Spice Communications has ambitious plans of becoming a national player from the 2-circle player that it currently is. Aircel, which has operations in Chennai, Tamil Nadu and the North-East (under the name Dishnet Wireless), has also applied for licences to create a more pan-India footprint.

The above applicants appear to stand a better chance of obtaining licences in new areas, given their existing operations.

There are indications that applications would be considered as per existing guidelines on a first-come-first-served basis, which suggests preference to these players, on a case-to-case basis. However, even if some of the new applicants manage to secure licences, spectrum allocation remains an issue.

Even on this score, the existing players appear better placed than the rest. A separate committee has been set up to look at licensing and spectrum allocation norms for new entrants into the telecom space. Given the current spectrum crunch, new players may also have to contend with very stringent norms for rollout as well as usage norms for spectrum.

Tulip IT, which is a countrywide provider of data connectivity, has applied for licences in six circles. With its VPN and network integration expertise, Tulip has the expertise to enter the fray as a service provider. But, as mentioned earlier, this would mean huge capital expenditure and low margins in the first few years of operation.

Pact with global players

Mahindra & Mahindra appears to be the only applicant in this category that has confirmed interest. The company plans an alliance with AT&T for this foray. Tech Mahindra, a telecom software company in which M&M holds a 44.4 per cent stake, has substantial experience in working with telecom service providers as well as equipment vendors and has a strong relationship with AT&T.

This trio appears to be a strong contender to offer significant competition to the entrenched players. An alliance with AT&T brings with it the latter’s expertise from running a highly successful telecom business in the US as well as its earlier experience partnering Idea Cellular in India; both appear to be huge pluses.

Alternative routes to a telecom foray

All the prospective applicants, however, need not take the traditional route to rolling out telecom services. Here are a few alternative avenues that they can explore:

MVNO (mobile virtual network operator): These kinds of operators do not own any spectrum or network infrastructure but buy it from existing operators and act merely as resellers. MVNOs usually have a strong brand image in one line of business and look to leverage on that in another business. Virgin Mobile, Disney Mobile and Tesco Mobile are a few successful examples.

This might work especially well for leading real-estate players such as DLF and Unitech, which have high visibility for their brands and may use this for providing connectivity to their townships. However, this concept is yet to evolve in India and the telecom regulator has asked operators for their opinion on this and is looking at evolving guidelines for the same.

Inorganic growth: The option of acquiring a presence through inorganic growth or acquisition of regional players is a route that is open to all applicants. There are a few regional and relatively small players, such as Shyam Telecom, HFCL Infotel, and Spice Communications, which may not be growing at a rapid pace. These companies (if they are open to stake sale) may offer new players an entry point into the market through the M&A route. Such acquisitions may offer a prospective entrant a readymade subscriber base and spectrum to work with.

Bidding for 3G alone?: A comprehensive policy on 3G services is still awaited from the telecom regulator/DoT. 3G services, at the most basic level enable provision of feature-rich voice, data and video services with a much faster throughput.

In this regard, new players may win licences and choose to focus only on high-end 3G services, if there is an auction for 3G spectrum, and new players are allowed to bid. These are high revenue earning services, though predicting the market for such services in the Indian context is a challenging task.

[Honest 836]

Future Group plans to foray as virtual network operator

4 Aug, 2008, 2223 hrs IST, ET

NEW DELHI: Business conglomerate Future Group said it is planing to enter in the fast growing mobile services as a franchisee for virtual network operators by next year.

"We are not in a hurry. We have just began talking with some network operators," Future Group Chief Executive Kishore Biyani said in their newsletter.

The company is likely to invest about Rs 100 crore for foraying into the mobile service , he added.

"We are looking at all consumer segments for growth in our business and mobile is one of the segments we are looking at," Biyani said.

Future Group, which has interests in real estate, logistics and media, has appointed consulting firm McKinsey and Co and UK's Value Partners Group Ltd as advisors for the business.

The idea is to allow customers to pay less for airtime as it has a grocery item such as rice or sugar he said adding "We plan to offer free outgoing calls to customers who buy food , groceries, clothes and mobile handsets from our stores.

A mobile virtual network operator is a company that provides mobile phone service but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service.

The government currently does not allow mobile virtual network operators in the country