Real estate major Parsvnath started the race for entry into the telecom sector early this month, only to be followed by Unitech and now reportedly DLF may also follow suit. The question most analysts are trying to answer is why suddenly realty majors are making a beeline for the telecom sector? The reasons range from easy cash flow in the real estate sector and a bid to diversify to the astuteness on the part of the realty doyens not to put ?their eggs in one basket.?
?Telecom is the most emerging sector in India today and real estate developers probably want to cash in on the boom. Also, by diversifying, they make their business model more sustainable. So in case the realty sector goes in for a decline after a few years, atleast their telecom business will give them the much needed revenue,? says a property expert.
Adds Pradeep Jain, chairman, Parsvnath Developers, ?with the government following an open policy on spectrum, we want to use this opportunity for providing unified access service on a pan-India basis, including rural telephony. This is a great opportunity for the company to diversify into a new business area, which is continuously growing. Despite increasing number of subscribers, the penetration of mobile telephony in India is still low as compared to developed countries. As and when the number portability is introduced, it would offer immense business opportunity to new entrants.?
Early this month, Delhi-based real estate developer, Parsvnath Developers Ltd submitted applications to the department of telecommunications (DoT) for providing unified access services in 22 telecom circles across the country.
The licence for unified access services would entail a 2G licence for GSM and a triple play of various services like IPTV, Wi-Max, internet, broadband and any other services relating to the signal. However, the company?s diversification into the telecom business would be subject to obtaining necessary approvals.
Last week saw realty major, Unitech Ltd make a foray into the growing telecom sector in the country. The company informed the National Stock Exchange that ?the board of directors at a meeting took on record that eight of its wholly-owned subsidiary companies have decided to submit applications to the department of telecommunications, ministry of communications and information technology to provide UAS in 22 telecom circles across the country.?