Unitech plans to enter telecom business

New Delhi: The beeline for new cellular licence has just got longer. Real estate developer Unitech Ltd on Friday said it plans to apply for licences to provide telecom services across the country.

The company proposes to put in its application through eight different subsidiaries for unified access licence in 22 circles. This will take the total number of applications to nearly 200 from over a dozen companies.

“The continuous rapid growth in India’s telephone services business indicates the enormous potential for future growth in this business. Further, it would help boost the group’s telecom and transmission tower manufacturing business,” Unitech said in a statement to the National Stock Exchange. Existing mobile operators added nearly 8 million new wireless subscribers in August making it the largest telecom market in the world.

Earlier, another real estate major Parsvnath had also put in its application for new licences. The past few months has seen a host of other companies applying for new licences, including Ruias promoted BPL, Spice, Datacom, Swan, ByCell and STel. While HFCL, Idea Cellular, Spice and Tata Teleservices are existing mobile operators wanting to expand their network to all the 23 circles in the country, Parsvnath has floated a special purpose vehicle in partnership with a foreign player to foray into telecom services. Swan and Cheetah are subsidiaries of Reliance Communication.

Apart from being attracted by the exponential growth in cellular subscriber base, the rush for new licence has also been largely due to high valuations that cellular operators are getting in the country. TRAI has also recommended giving 3G spectrum to only existing operators and these companies could also be lining up for such an eventuality.

The Department of Telecom has set up an internal committee to evaluate these applications and also to formulate a formula for allocating spectrum. Existing pan India operators, meanwhile, have claimed first right to the available spectrum and have even sent a legal notice to the Government urging immediate release of radio frequency before new applications are considered.