Telstra, the Australian communications major, is seeking to enter India to provide a range of telecom services to multinational enterprise customers, it is learnt. The company wants to use the ISP (internet service provider), NLD (national long distance) and ILD (international long distance) route for that.
Telstra, which was in a joint venture with the Modi group in India earlier, never returned after selling its stake some years ago. But Telstra never lost interest in India, it is believed, especially as the telecom market in Australia is saturated, while the teledensity in India is still around 50%.
Telstra has sent its proposal to the Foreign Investment Promotion Board (FIPB) in the finance ministry. FIPB, in consultation with other key ministries, is responsible for clearing all foreign investment proposals.
According to news reports coming out of Australia, Telstra’s future would be decided by a new telecommunications legislation — Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill.Although the Bill may be put on ice, it would eventually decide whether Telstra remains vertically integrated or not.
The ILD and NLD licencees in India include foreign players like BT Global, AT&T, Vodafone, Verizon, and SingTel Global. It is learnt that some of these, and even Telstra, may like to bid for the upcoming broadband wireless services in January 2010.
While 3G spectrum auction is scheduled to begin on January 14, 2010, broadband wireless bidding would be held two days after the close of 3G auction. Meanwhile, the Indian telecom market in the 2G space has several foreign players including UK’s Vodafone, Singapore’s SingTel and Temasek, Malaysia’s Telekom Malaysia and Maxis, Norway’s Telenor and UAE’s Etisalat.
In the recent past, a Telstra official had indicated that Australian companies can be expected to actively pursue the economic opportunities in India as they have in China.
To promote growth of NLD service, the entry fee for new licence was recently reduced from Rs. 100 crore to Rs. 2.5 crore. The annual licence fee for NLD licences was slashed from 15% to 6% of AGR.
As for ILD service, the entry fee was reduced from Rs 25 crore to Rs 2.5 crore. And, the annual licence fee for ILD licences was decreased from 15% to 6% of AGR.
Foreign investment in the telecom sector is currently capped at 74 per cent. Also, there are several security-related conditions that a telco must satisfy to operate in India.
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