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15 more join licence queue

At least 15 new applicants have applied for a telecom service licence to cater to more than 250 circles after the industry regulator eased up entry for new players, reports Archana Khatri.

business Updated: Sep 27, 2007 22:02 IST
Archana Khatri

At least 15 new applicants have applied for a telecom service licence to cater to more than 250 circles after the industry regulator eased up entry for new players and the numbers are growing by the day. It matters little — at least for now — that many of them have no previous experience in the industry.

According to industry sources, a joint venture of AT&T with Mahindra Telecommunications Investment, the Hinduja group and building materials firm Anantraj Industries are also expected to apply before the cut-off date of September 30.

Since the Telecom Regulatory Authority of India's (TRAI) recommendations were announced in August 29, when it called for the removal of a cap on service providers in any circle, applications have been pouring in from firms that know more about shipping and real estate than about the dynamic, fast-paced telecom industry in which advanced software and high-technology network equipment drive core operations.

Delhi-based realty players DLF, Unitech and Parsvnath Developers, financial service group Indiabulls and consumer electronics player Videocon Industries have already confirmed their intention to apply for a pan-India licence.

The Department of Telecommunications (DoT) is trying to arrive at guidelines to screen the applications received, aiming to use technical criteria to weed out "non-serious" players in an industry where both licences and wireless spectrum are scarce commodities. Industry watchers say inexperienced applicants may be eyeing easy cash premiums from future buyers or partners.

"Diverse views are coming in, and largely the selection will be based on TRAI's guidelines," said a source in the DoT. The department is also expected to keep in mind the future availability of spectrum.

GSM body Cellular Operators Association of India (COAI) had written to the DoT earlier this month, expressing concerns about little-known firms aspiring for licences, saying they were only out to circumvent policy and licence restrictions.

Arpita Pal Agrawal, Associate Director with consulting firm Pricewaterhouse Coopers told Hindustan Times that theoretically, inexperienced players could still do business by hiring managers and experts while outsourcing core operations.

"What needs to be seen is if they are trying to buy the spectrum now and encash it later. They can't be looking at an already competitive telecom business," she added.