Telstra tipped to enter Indian wireless market

Stuart Corner
Wednesday, 07 October 2009 12:49

IT Industry - Strategy

India's Financial Express newspaper claims that Telstra is planning to re-enter the Indian mobile communications market by bidding for spectrum in the upcoming auction of 3G and broadband wireless access spectrum.

Citing unnamed sources, it says that Telstra plans to bid for broadband wireless access spectrum rather than 3G spectrum.

According to the most recent information memorandum on India's Department of Telecommunications Web Site (12 December 2008) the Department will auction 3G spectrum in the 2.1GHz band and broadband wireless access spectrum in the 2.3GHz and 2.5GHz bands. However Telecom Asia this week reported a new DoT information memorandum stating that "The Department of Telecom has decided to auction only 2.3GHz spectrum in the upcoming WiMAX auction, leaving the 2.5GHz band off the table for now."

The Financial Express claims that AT&T, Telstra and SK Telecom of Korea are all planning to bid for spectrum. It said that DoT had confirmed AT&T's interest, and that Telstra and SK Telecom had declined to comment.

Were Telstra to enter the Indian market this would be its second such foray. In 1993 it formed a joint venture with India's Modi Group - initially known as Modi Telecom and later as Modi Telstra - to build and operate GSM networks. Telstra had a 49 percent stake.

Telstra sold out to Modi in 2000 after a business review in 1999 indicated that it was not getting forecast returns, and that the RoI was below expectations. Telstra said at the time that India's stringent licensing regime had a negative impact on returns.

(The CEO of the company was a former Telstra executive Simon Beresford-Wylie who went on to become a senior Nokia executive and CEO of Nokia Siemens networks before resigning last month).

Following Telstra's exit the company changed its name to Spice Telecom. It has since become part of Idea Cellular but still reports subscriber numbers separately and at the end of March 2009 ranked ninth with four million subscribers - a number which might seem substantial but which amounted to only one percent of the Indian market. Idea Cellular (in which AT&T once owned a stake) was the fifth largest operator with close to 40 million customers.