AT&T Bids for Indian Mobile Telecom Licenses

Published on: 1st October 2007

BANGALORE -(Dow Jones)- U.S. telecommunications major AT&T says it has partnered Mahindra Telecommunications, a Mahindra Group company, to bid for licenses to provide telecommunications services in all 22 circles in India.

AT&T filed the application with India's Department of Telecommunications, AT&T said in a statement.

"This is an important step toward participating in India's upcoming spectrum allocation proceedings," AT&T said in the statement.

AT&T's move adds to a spate of applications for such licenses as the India government said it will stop accepting applications for Unified Access Service Licenses from Oct. 1. As a result, over 200 companies have applied for the UASL in last few days alone, said analysts Monday.

The government wants to curtail the number of licenses as there are fears that some non-serious players, upon receiving spectrum, may indulge in spectrum trading, said analysts.

UASLs are highly sought after as they allow the license holder to provide any kind of communication services, and not just mobile telephony.

Among major players to have applied, or have decided to apply, for the UASL include property majors DLF, Unitech, Parsvnath Developers, Hinduja TMT and Videocon Industries.

India is divided into 22 major telecommunications circles based on geography and service providers need licenses to operate in each of the circles.

Indian regulations allow foreign direct investment of up to 74% in the telecommunications sector.

"There is a mad rush for the licenses as companies fear the government might just put a cap on the total number of companies who can offer communication services," said Harit Shah, an analyst at Mumbai-based brokerage Angel Broking Pvt. Ltd.

And with India being one of the fastest growing telecommunications markets in the world, adding as many as eight million users each month, the potential for the sector is enormous, analysts said.

This has drawn local as well as foreign investors including Vodafone Group Plc. and Maxis Communications Bhd.

The country had 241 million telephone subscribers as of Aug. 31, including about 200 million wireless users.

"The market is already overcrowded and there is bound to be consolidation down the line," said Shah.

Currently, major telecom operators include Bharti Airtel, Reliance Communications and state-run Bharat Sanchar Nigam Ltd. and UK's Vodafone.

-By Romit Guha, Dow Jones Newswires; 91-9900181471; romit.guha@dowjones.com

(END) Dow Jones Newswires

 

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