Telstra makes much delayed foray into Indian telco market

Stuart Corner
Wednesday, 02 November 2011 08:03

IT Industry - Strategy

Telstra's Indian joint venture, Telstra Telecommunications Private Limited (TTPL) has finally been awarded licences to provide customers in India with international and national long-distance telecommunications and Internet services, but is it now entering the market three years behind major global telcos like BT & AT&T.

Indian newspaper, The Hindu, commented: "The enterprise communication space is already crowded with the likes of BT, AT&T, Cable & Wireless, and Orange Business present in the market. Indian operators, including Bharti Airtel, Tata Communications and Reliance Communications, are vying for the same market.

And the other major global players have been active in the Indian market much longer than Telstra, which has taken years to obtain its licences.

In October 2008, Verizon Business announced an expansion of its presence in India through Verizon Business India, which it said was the trading name of a joint venture between it and the Videocon Group of Mumbai. Verizon Business held a 74 percent stake. Prior to this both BT and AT&T had announced very similar initiatives putting their equity in the Indian JVs at 74 percent.

And in February 2010 Pacnet announced that its joint venture Pacific Internet India Pvt Ltd (Pacnet India) had obtained National Long Distance and International Long Distance licenses from the Department of Telecommunications of India and would expand its services to include international private line and ethernet international private line services, as well as domestic and international IP VPN services.

All these entered the market after being granted permission to increase their equity in Indian JVs from a minority share to 74 percent. Telstra, however seemed to be having trouble doing so.

In January 2010, the Indian Government rejected Telstra's plan to increase its shareholding in its Indian subsidiary saying that the move would have breached the ceiling on foreign shareholding. Telstra had submitted an application to increase its stake in Telstra Telecommunications Pvt Ltd, based in Mumbai, from 49 percent to 74 percent. Telstra had earlier confirmed that it had lodged the application "for the purpose of formalising our presence in India."

Telstra Telecommunications - a joint venture with Microland - in a separate application lodged with India's Foreign Investment Review Board on 19 November 2009, he Indian Government rejected Telstra's plan using the ISP, NLD [National Long Distance] and ILD [International Long Distance] licenses to multinational enterprise customers."

Having now gained its licence, Telstra International says it will offer services initially in seven cities - Bangalore, Calcutta, Chennai, Delhi, Hyderabad, Mumbai and Pune - within the next six months, via international gateways in Mumbai (formerly Bombay) and Chennai (Madras) that will provide customers with direct routes into networks in Europe and Asia.

"Aside from local contract billing capabilities, customers can also benefit from Telstra's suite of connectivity and managed services, and enhanced in-country service centre support," Telstra International said.

"As a result, Telstra will have greater control of service performance and customer experience, while providing enterprises with more comprehensive end-to-end managed services. Telstra will also extend its industry standard service level agreements, offer higher levels of service monitoring, and help reduce risks with multi-level resiliency and redundancy in network design."

Tarek Robbiati, group managing director for Telstra International Group, said the licences would enable Telstra International to support the inflow of businesses setting up operations in India as well as local companies expanding into emerging markets by giving them access to Telstra's connectivity in Asia and globally.