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Australia’s Telstra sniffing around

Australia’s leading telecom player Telstra is keen on entering the Indian market, according to industry sources.

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Company still cagey about details, but CEO is certainly eyeing India.

NEW DELHI: Australia’s leading telecom player Telstra is keen on entering the Indian market, according to industry sources. So far, no telecom company from Australia has partnered any Indian service provider. Industry watchers point out that given the saturated mobile market in Australia, it’s logical for companies in that country to look at India, where teledensity is only 12.73%.

India is witnessing significant growth in mobile subscriber numbers, with over 5 million additions a month in the recent past. There are currently 140 million telecom subscribers in India (90 million mobile and 50 million fixed line connections).

When asked about the timing of Telstra’s entry into India and its potential partner, the head of news services at Telstra, Andrew Maiden, told DNA Money, “The company’s longstanding policy is to avoid commenting on speculation about these subjects”.

The Indian telecom sector has already attracted international players like UK’s Vodafone, Singapore’s SingTel and Temasek, Malaysia’s Telekom Malaysia and Maxis, and Hong Kong’s Hutchison Whampoa. Experts who feel that Australian telecom players could be interested in the Indian market cite a recent research study.

According to Market Clarity, an Australian research group, the mobile market in Australia witnessed a growth of 120.6%  since 2000, but the market will slow down to a growth of only about 17.1% by 2010. Market Clarity CEO Shara Evans commented in the study that, “with very low potential for future growth in services, carriers will have to look to added value to grow their mobile revenues”. While Telstra is the leading telecom operator in Australia, Optus is yet another service provider there. Units of UK’s Vodafone and Hong Kong’s Hutchison Whampoa serve the Australian market.

Another indicator that Telstra may be keen on the India market is that Telstra CEO Solomon D Trujillo (pictured), who was earlier the CEO of Europe’s telecom biggie `Orange’, is upbeat on India.

In a recent lecture at the University of California at Los Angeles (UCLA), Trujillo said, “Asian transformation is not only about China.

China’s most populous neighbour, India, is experiencing economic growth that rivals in scale and significance what is now occuring in China”.

While pointing out that, “Australian companies can be expected to actively pursue the economic opportunities in India as they have in China”, he added, “in fact, many are already at work doing deals and setting up projects in India”.

According to Trujillo, “my company, Telstra, will also play its role in supporting increased Asian regional cooperation and integration”.

Among the recent deals in India, Vodafone picked up almost 10% in Bharti Tele-Ventures (now Bharti Airtel) for $1.5 billion. Telekom Malaysia bought 49% in Spice Telecom for $179 million. Maxis picked up 74% in Aircel for $1.08 billion, and Temasek 9.9% in Tata Teleservices for an undisclosed amount.

In Idea Cellular, the Birlas have bought the 48.12 % equity held by the Tatas in the venture.

But, the Birlas are likely to sell a part of this holding to foreign investors. They are yet to name the foreign partners for Idea.

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