Telekom Malaysia lines up big plans for India

NEW DELHI: Asian communications major Telekom Malaysia is keen on tapping the enterprise and managed services business in India. It plans to enter this space through its partner here — Spice Communication. “We have huge submarine cable assets, which is amongst our strengths. We are keen to offer global connectivity to India,” Yusuf Annuar Yaacob, CEO, Telekom Malaysia International, told ET.

Spice, in which TMI holds a 49% stake, currently offers mobile services in Karnataka and Punjab circles. It has applied to the department of telecommunications (DoT) for national and international long distance licence. \ According to Mr Yaacob, TMI was awaiting DoT nod with regard to Spice’s ILD licence. “Following this, Spice, riding on our undersea cables can be a very competitive player in the ILD business,” he added.

TMI and Spice will have to compete with other international majors like AT&T, BT and Cable & Wireless & Indian operators like Sify, Dishnet Wireless and Hutch-Essar, who have also applied for NLD licences, in addition to the existing — BSNL, Bharti, Reliance Communications and Tatas-owned VSNL.

Spice had recently announced a pan-India $2.5bn expansion to be present in the remaining 21 circles within the next three years. The company had also said that it will be tapping the markets in December to offload the 20% stake to raise from $250-350m, followed by another float in ’08, to raise a further $350m.

When asked on the equity holding of both partners post-IPO, Mr Yaacob said: “Following the IPO next, the Modis and TMI will each have a 40% stake with the public holding the remaining 20%.

Additionally, commenting on the speculation doing the rounds in India that TMI will soon use the “call waiting option” clause in the shareholders agreement and increase its stake in Spice Communications, so as to make the latter its subsidiary, Mr Yaacob said: “There is no such plan. This clause is just a mechanism, which allows TMI to bale out the company in case of any problem in the future.”

Mr Yacoob also reiterated that Spice wanted to expand its presence to other circles in India via the mobile virtual network operator route, rather than replicating infrastructure creation across the country.

An MVNO service provider is one where the operator is just a marketing and branding outfit, but does not own the network infrastructure or spectrum. Instead, an MVNO operator buys air time from service providers who own physical infrastructure. At present, Indian regulations do not permit such services.