Datacom to Announce $2.8 Billion GSM Tender Next Week

India's Datacom is planning to issue a tender for up to 70 million GSM lines for its new network next week in a contract which could be worth over Rs 12,000 crore (US$2.8 billion) in the next four years.

"We shall be releasing Request for Proposal (RFP) from telecom vendors for 70 million GSM lines. Our plan is to start rolling out network by August this year," Ravi Sharma, Managing Director of Datacom told reporters.

Datacom's parent company, Videocon had previously announced plans to invest around US$1.4 billion in telecoms - which it has now raised to the US$2.8 billion for this GSM tender.

Datacom was recently awarded GSM licenses in all of India's 22 license circles and is currently waiting for the radio spectrum to be allocated. The company has been reported to be in talks with several Gulf companies, including Qatar Telecom and Etisalat to seek funding and expertise for the network rollout.

In a separate development, talks between Videocon and Motorola over a possible purchase of Motorola's handset division have escalated over the past couple of weeks. "I have thrown my hat in the ring. And they will say it is a good hat as it is an Indian hat," Venugopal N. Dhoot, the chairperson and managing director of Videocon, told reporters on the sidelines of a conference on trade pacts last month.

An acquisition would be difficult as Motorola's handset division is independently valued at around US$3.8 billion, whilst Videocon Group values itself at US$2.5 billion (independent valuations are around the US$2 billion mark). The company has successfully raised in principle $700 million in financing for a recent attempt to buy South Korea's Daewoo Electronics. The bid was rejected by the firms creditors - and the recent credit crunch could make raising the debt more difficult the second time round.

Videocon is an industrial conglomerate with interests all over the world and based in India. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico. Turnover in 2007 was US$4.7 billion

Posted to the site on 2nd June 2008