C&W dials up India for long-distance ops

NEW DELHI: After AT&T, British Telecom and Verizon, now its the turn of the UK-based Cable & Wireless (C&W) to enter the long-distance telephony market in India. The $6-billion C&W group, which traces its history to John Pender the founder of British Indian Submarine Telegraph Company, the company that rolled out India���s first submarine telegraph cable between Bombay and London in 1870, is all set to enter the national-long distance (NLD) and international long-distance(ILD) market in India.

The UK company will be acquiring 74% stake in Cable & Wireless Networks India, an entity which has been incorporated early this month. This company currently has nominee shareholders. The remaining 26% will be picked up by an Indian joint venture partner.

As per the existing policy, FDI for undertaking ILD services in India has a cap of 74%. The foreign giants who have initiated moves in the NLD/ILD area are also taking the JV route as required by policy. AT&T has joined hands with the Mahindras while BT has formed a JV with Bhartias of Jubilant for their foray into the long-distance telephony venture.

Sources said, both C&W and Verizon are currently scouting for local partners for their respective ventures. It is expected that both of them would be tying up with an India partner for whom telecom is not a strategic business. According to sources, C&W has not yet applied for NLD and ILD licences but is going to approach the department of telecommunications shortly. In addition to its global competitors C&W will also face stiff challenge from the four domestic players ��� VSNL, Bharti, Reliance and BSNL.

Though its wholly-owned entity In India ��� Cable & Wireless Global (India), C&W has been engaged in providing IT services, captive BPO activities apart from representing C&W products and services in the market. As reported first by ET last year, it had a run in with DoT and was under investigation for violation of telecom sector licensing norms and FEMA regulations.

C&W, which had revenues of ��3.2 billion for 2005-2006, had last year announced a major global restructuring involving split of the group���s UK and international divisions. C&W International operates integrated telecom companies in 34 countries offering mobile, broadband, domestic and international fixed-line services. This unit has principal operations in the Caribbean, Panama, Macau, Channel Islands and Monaco.

C&W UK ��� the other business unit ��� provides enterprise and carrier solutions to the largest users of telecom services across the UK, the US, Asia and continental Europe apart from wholesale broadband services in the UK.

The entry of new players in NLD/ILD business follows some significant policy changes in licence and entry fees along with other requirements for granting NLD and ILD licences. These were implemented to bring more competition in the long-distance telecom market. C&W���s entry in the NLD/ILD market would also mark the growing presence of international giants in the Indian telecom market.