DLF planning to enter telecom business
DLF is reportedly examining two options - applying for universal access service licences in all 22 circles with the department of telecom (DoT) and joining the queue for allocation of spectrum, or buyout any of the existing applicants or operators.
By Joji Thomas Philip & Mayur Shekhar Jha , TNN |
NEW DELHI: The flurry of companies seeking telecom licences seems no sign of ending. ET has learnt that India‘s largest realty firm DLF is also planning to foray into the telecom business. According to sources, DLF is examining two options – applying for universal access service licences in all 22 circles with the department of telecom (DoT) and joining the queue for allocation of spectrum, or buyout any of the existing applicants or operators.
Put simply, after Parsvnath Developers and Unitech, Delhi-based DLF is soon set to be the third real estate player which intends to enter the mobile telephony space. However, when contacted over this issue, the DLF spokesperson refused to comment.
Over the last couple of weeks, close to 180 applications have come in for new universal access service licences and many more are expected to be filed. It was just last week, that India’s second largest realty firm Unitech said it would apply for mobile licences in all 22 telecom circles. “The continuous rapid growth in India’s telephone services business indicates the enormous potential for future growth in this business. Further, it would help boost the group’s telecom and transmission tower manufacturing business,” Unitech said in a statement to NSE.
Although a nation-wide application will cost a company just about Rs 1,700 crore, a pan-India license, if awarded, comes with 2G spectrum, 4.4 MHz in the case of GSM players and 2.5 MHz in the case of CDMA operators. A licence with the initial spectrum is worth several multiples over the Rs 1,700 crore entry fee. Sources say DLF’s decision to venture into full-fledged telecom services could stem from the fact that the country is setting global records every month in subscriber additions . For instance, GSM and CDMA operators combined together added over 8 million new mobile connections last month. Additionally, industry analysts estimate there is further scope for growth as the number of monthly adds is likely to touch the 10-million mark soon.
It must also be noted that with companies making a beeline for new cellular licences, DoT is learnt to have constituted an agency consisting of members from different departments of the government to establish the actual identities of the promoters and shareholders behind the new applications for telecom services.
Put simply, after Parsvnath Developers and Unitech, Delhi-based DLF is soon set to be the third real estate player which intends to enter the mobile telephony space. However, when contacted over this issue, the DLF spokesperson refused to comment.
Over the last couple of weeks, close to 180 applications have come in for new universal access service licences and many more are expected to be filed. It was just last week, that India’s second largest realty firm Unitech said it would apply for mobile licences in all 22 telecom circles. “The continuous rapid growth in India’s telephone services business indicates the enormous potential for future growth in this business. Further, it would help boost the group’s telecom and transmission tower manufacturing business,” Unitech said in a statement to NSE.
Although a nation-wide application will cost a company just about Rs 1,700 crore, a pan-India license, if awarded, comes with 2G spectrum, 4.4 MHz in the case of GSM players and 2.5 MHz in the case of CDMA operators. A licence with the initial spectrum is worth several multiples over the Rs 1,700 crore entry fee. Sources say DLF’s decision to venture into full-fledged telecom services could stem from the fact that the country is setting global records every month in subscriber additions . For instance, GSM and CDMA operators combined together added over 8 million new mobile connections last month. Additionally, industry analysts estimate there is further scope for growth as the number of monthly adds is likely to touch the 10-million mark soon.
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The rush for licences comes as Trai had recently recommended that there be no cap on the number of operators offering telecom services in a circle. Another factor that has played a major role in the slew of applications is related to 2G spectrum. This is because radio frequencies on which mobile services operate are allocated based on the order of the applicants, or in a first-come-first-serve queue system . If Trai’s proposal, that the subscriber base linked spectrum allocation criteria be hiked several times before existing players are allocated fresh spectrum is accepted by the DoT, then several new applicants in queue will be eligible to get spectrum to launch services. It must also be noted that with companies making a beeline for new cellular licences, DoT is learnt to have constituted an agency consisting of members from different departments of the government to establish the actual identities of the promoters and shareholders behind the new applications for telecom services.
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