Videocon seeks telecom licence; may tap Verizon
The consumer electronic giant Videocon has applied for mobile licences in all 22 telecom circles in the country.
By Joji Thomas Philip, TNN |
NEW DELHI: After its foray into national and international long-distance telephony, consumer electronic giant Videocon now wants to foray into the mobile telephony business. The company has applied for mobile licences in all 22 telecom circles in the country.
More importantly, according to industry sources, this may mark the entry of the US communication giant Verizon into this sector in India as the latter is likely to be Videocon’s JV partner for its mobile telephony foray.
When contacted, Videocon’s Chairman Venugopal Dhoot confirmed the development and said, “We have applied for mobile licences in all the 22 circles. We have tied up with an American company to be our JV partner.” Mr Dhoot, however, refused to reveal if the JV partner was Verizon.
Industry sources said that Videocon, which has a JV with Verizon, is most likely to extend the partnership for the mobile licences also. Earlier this year, Verizon had partnered Leo Communications, a subsidiary of the Videocon Group, while applying for national and international long-distance licences in India.
Leo holds 26% stake in the JV. Under existing regulations, if Verizon were to be Videocon’s partner for mobile licences, the US major can hold a 74% stake in the company.
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Videocon’s application comes just days ahead of the October 1 deadline set by the Department of Telecom (DoT) after which it will stop accepting new applications for the time being. Videocon’s decision to venture into full-fledged telecom services could stem from the fact that India, which is the world’s fastest-growing telecom market, is setting global records every month in terms of 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.
Over the past couple of weeks, close to 180 applications have come in for new universal access service licences (UASL) and many more are expected to be filed before the October 1 deadline. On Wednesday, India’s largest realty firm DLF and Shyam Telelink, which offers CDMA-based mobile services in Rajasthan, also applied for mobile licences across the country.
ET had first reported earlier this week that DLF would be applying for telecom licences while also adding the Delhi-based realty firm was on the lookout to buy an existing telecom company. DLF is the fourth realty firm to apply for mobile telephony licences.
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Parsvnath Developers, which applied in August, was the first, followed by Unitech last week, while Indiabulls is learnt to have submitted its application earlier this week. DLF sources said initial investments in telecom would be in the region of Rs 5,000-8,000 crore.A nationwide application will cost the company around Rs 1,700 crore. More importantly, a pan-India licence, if awarded, comes with free 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.
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