AT&T and Telstra seek to re-enter India

Written by Anandita Singh Mankotia | New Delhi | Updated: Oct 7 2009, 14:27pm hrs
The worlds largest communications firm, the $124-billion AT&T, is poised to re-enter the booming Indian telecom market, nearly five years after it left the country, exiting the three-way venture it had with the Tata and AV Birla groups. That venture, Idea Cellular, is the countrys fifth largest mobile operator today.

Apart from AT&T, other two global majors who are expected to enter the Indian market through the 3G /broadband wireless access route are Australias Telstra, which had exited from its 49% stake in Modi Telstra in 2000 and the South Koreas $12-billion SK Telecom.

The irony is that AT&T exited what is now known as the 2G mobile space, but can now re-enter only the 3G sapce, auctions for which are expected to be conducted this fiscal.

Officials at the department of telecommunications (DoT), the administrative ministry, told FE that AT&T has shown a firm interest in bidding in the 3G spectrum auctions and has been in touch with the department after the announcement of the reserve price. However, the spokesperson for the company in the US declined to comment to a specific query by FE, stating, We have no comments.

Spokespersons of Telstra and SK Telecom did not respond to FEs e-mail queries.

In a way, AT&Ts attempt at re-entering the Indian market tells an interesting story of the emergence of India as the fastest growing telecom market globally in the last few years. AT&T had quit India in 2005 after selling its 33% stake in Idea Cellular, following its merger with Cingular Wireless globally. At that time it received around $250 million for its stake. Today, the stake would have been valued at over $3 billion.

Now, a pan-India licence would cost AT&T Rs 1,651 crore. Add a reserve price for all-India auctions at Rs 3,500 crore, which if successful, could go up to around Rs 8,000 crore.

AT&T already has an international and domestic long distance licence in India. Telstra, sources said, would bid only for the BWA spectrum for broadband services.

The 3G and BWA auctions are open to both existing licensees and foreign operators who have experience in running 3G networks.

Apart from the three global majors who have evinced interest in the 3G/BWA auctions, all the other global majors are present in India. Vodafone has 33% stake in Vodafone-Essar, Malaysias Maxis is present in the country through its 74% stake in Aircel, Telekom Malaysia has over 15% in Idea Cellular. SingTel has around 30% stake in Bharti Airtel.

Norways Telenor has acquired 67.25% stake in a new licensee Unitech Wireless while UAEs Etisalat has 45% stake in Etisalat DB. Both these companies are scheduled to start their operations later this year. Sources said that these two companies would bid selectively for some circle for 3G/BWA services.