Telstra to become a telco in India, report claims UPDATED

Stuart Corner
Friday, 27 November 2009 03:54

IT Industry - Strategy

According to India's Business Standard newspaper Telstra is planning to re-enter India's telecommunications services market offering national (NLD) and international long distance (ILD) services and Internet access services.

The paper claims that that Telstra Holdings, a 100 percent subsidiary of Telstra, has applied to India's Foreign Investment Promotion Board (FIPB) for increasing its stake in the Indian company, Telstra Telecommunications, to 74 percent from 49 percent. It claimed to have evidence of these plans saying "After approval from FIPB, the company plans to acquire NLD, ILD and ISP licenses from the Department of Telecommunications, the company said in a note to the former on November 16.

In response to a query from iTWire, Telstra has confirmed that it had lodged an application with the FIRB "for the purpose of formaiising our presence in India," but gave no further details. it added. "Telstra International has been committed to the growing Indian market for some time and already has a presence there to support our multinational enterprise customers."

The major global carriers p - BT, AT&T and Verizon Business all have similar interests in the Indian market and over the past year or so have move to obtain national and international long distance licences in the country. it would seem likely that Telstra would follow a similar strategy. A Telstra spokesman told iTWire "“Telstra International has been committed to the growing Indian market for some time and already has a presence there to support our multinational enterprise customers."

According to the report "Telstra Telecommunications is a joint venture company in which India's Microland Investment has a 51 percent stake and Telstra Holdings has a 49 percent stake. Prior to increasing its stake to 74 percent, Microland, an IT infrastructure services provider, would replace Microland Investment as the shareholder and ultimately would have a 26 percent stake in the entity.'

It said the JV had been incorporated in August this year as Tonexact Telecommunications, and had changed its name in October to Telstra Telecommunications. The Business Standard article was the only reference iTWire was able to find on Google to the company, by either name. iTWire is waiting on comment from Telstra and will update this article when it becomes available.

The story follows one in October in the Financial Express claiming that Telstra was planning to bid in the upcoming auction of 3G and broadband wireless access spectrum. Telstra declined to comment.

Were Telstra to enter the Indian market this would be its third 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 negatively impacted returns.

Telstra also held shares, through Telstra Infrastructure Leasing and Finance in VSAT operator TVC India, in a three-way venture between VSNL and Tata. Telstra sold out in 2004.