It’s India calling for AT&T again

US-based AT&T is exploring the possibility of re-entering into India’s lucrative mobile telephone service market. Within less than two months of being at the helm

US-based AT&T is exploring the possibility of re-entering into India’s lucrative mobile telephone service market. Within less than two months of being at the helm, Randall Stephenson, the chief executive officer of the world’s largest telecom service company is coming to India on a three-day visit beginning July 11. He will also be exploring the possibility of outsourcing some of its activities related to software development to India.

During his three-day visit, Stephenson will meet secretary of the Department of Telecommunications (DoT) and the chairman of Telecom Regulatory Authority of India (Trai) among other government officials. In Bangalore, he will meet officers of software companies, including Infosys chief.

AT&T can enter into the Indian market either through acquisition of an existing mobile service provider or by acquiring a new licence for mobile services. At present, Idea and Spice can be two acquisition targets in GSM mobile space. Spice, with its operations in only two circles — Punjab and Karntaka, may not be attractive for a giant like AT&T.

There is no spectrum available for 2G mobile services, the existing standard for GSM. However, a new entrant has a chance in 3G services. The government is finalising policy for 3G spectrum. Dayanidhi Maran, when he was the communications minister, had announced that the government would auction spectrum for 3G services. The regulator had also recommended the same. If the government decides to go ahead with global auction of 3G spectrum, then AT&T may participate in it.

AT&T is presently a national long distance (NLD) and international long distance (ILD) service provider in India. It was first to apply for the licences, when the government revised the licensing conditions last year. It launched its services in April this year and became the first international player to launch services.

AT&T exited Indian mobile service market in July 2005, when it sold its equity in Idea to Tata and Aditya Birla groups. It had entered into Indian mobile market through a JV with Aditya Birla group by acquiring cellular mobile licences for Maharashtra and Gujarat in 1995. Later it merged with Tata’s Andhra circle to form Idea.

In December 2003, it sold its 49 per cent equity in BPL Cellular, a cellular service provider in Kerala, Maharashtra and Tamil Nadu, to BPL Mobile promoted by Rajeev Chandrashekhar. The company had invested about Rs 750 crore in this venture and had existed without making any gains on the investments. The reason for its exit was that the company was then focusing on North America. It got equity in BPL Cellular when it acquired US West internationally, which owned 49 per cent equity in BPL Cellular.

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With addition of around seven million new mobile subscribers every month ( the growth trend for last one year), India is the fastest growing cellular market in the world. It is attractive for any telecom service provider to offer services in India. This is the reason that Vodafone bought Hutch’s 67 per cent stake in Hutch Essar, the second largest GSM mobile telecom service provider in India at a whopping $11.1 billion.

AT&T is the among the largest telcom operators in the world in terms of revenues. Its revenues totalled $29 billion during the first quarter of this year.