Gold Rush for telecom licences

Updated on Oct 01, 2007 10:03 PM IST

Over 500 applications have been received so far for licences to run telecom services in the country's 22 circles, reports Archana Khatri.

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Hindustan Times | ByArchana Khatri, New Delhi

At least 20 new applicants with 318 applications joined in on Monday to scramble for licences to run telecom services in the country's 22 circles, taking the total applicants to about 30 and applications to 518.

The gold rush that resembles a run to get approvals for special economic zones (SEZs) began after the Telecom Regulatory Authority of India (TRAI) permitted an unlimited number of players to enter the industry. The race has brought in a motley mix of seasoned players, aggressive corporates and me-too applicants hoping to re-sell permits, say industry watchers.

Most applicants want pan-India licences, which on current pricing would need Rs 1,600 crore each, but each licencee needs to pay only Rs 15,000 with a fresh application, making a casino game for licences.

Swiss operator Bycell, CD-maker Moser Baer, US telecom giant AT&T with its Indian partner Mahindra Telecommunications, a subsidiary of copper smelter firm Sterlite Industries, Sterlite Infrastructure, consumer durable major Videocon and telecom value added service provider Celebrum were among those who sought telecom licences on Monday.

BPTP, Balasore Alloys, Guntur Mines, Ispat Industries, Acme Telepower, Prithvi Info, Next Gen Telecom, Met Telecom, Avnija Properties and HTMT Telecom were also among the last-minute applicants.

Realtors DLF, Unitech and Parsvnath Developers and financial service group Indiabulls were among earlier applicants.

Since August 29, when the TRAI 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.

The Department of Telecommunications (DoT) is already gearing up to weed out the "non-serious" applicants – jargon for those who may want to trade their licences or cash out with lucrative partnerships.

Most of the early licence holders for telecoms in the past decade have cashed out.

There have been reports of a two-stage selection process and a lock-in period to ascertain the seriousness of the applicant, but an official associated with forming new screening guidelines said "there are no facts in the reports and it would be too early to comment anything at this stage."

According to TRAI, The total number of subscribers in the country crossed 241 million at the end of August – up from nearly 233 million a month earlier.

Yet, the country's teledensity is only around 21 per cent in a nation where the middle class alone is estimated at between 30 and 40 per cent of one billion people.

DoT plans to have 500 million subscribers by 2010.

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