Hutchison Hedges its Bets in India, Seeks Fixed-Line Licenses
--From AOL.-- Cooters
New Delhi, Jan. 30 (Bloomberg) -- Hutchison Whampoa Ltd., Hong Kong's biggest conglomerate, is hedging its bets in the Indian telecommunications services market by applying for fixed- line phone licenses that now allow limited-range mobile services.
Hutchison, with controlling stakes in four mobile phone operators, is the largest mobile phone company in the country with about 20 percent of 3.1 million mobile subscribers.
``I'd be surprised if they have designs to offer fixed-phone services,'' said Abhijit Attavar, a telecommunications analyst with Dresdner Kleinwort Benson in Hong Kong. ``They seem to be keeping their options open by getting a foot in the door'' to offer limited-range mobile services.
Hutchison is among 52 companies that have also applied for such licenses, according to the Business Standard newspaper. Other applicants include Essar Teleholdings Ltd., Himachal Futuristic Communications Ltd. and Reliance Telecom Ltd.
The Indian government announced new guidelines for fixed-line services on Jan. 25 and permitted operators to offer mobile services in an area about 25 kilometers in radius using technologies such as CDMA, or code-division multiple access. The government says the move is aimed at raising the number of phones per 100 people to seven by 2005 from three at present. That would require $37 billion in investment.
Hutchison owns 49 percent of Sterling Cellular Ltd., a mobile phone operator in New Delhi, which has applied for fixed-line phone licenses in the three regions of Delhi, Maharashtra and West Bengal.
``The way these fixed licenses are configured makes us believe that they are (for) mobile services,'' said Asim Ghosh, managing director at Hutchison Max Telecom Ltd., the mobile phone operator in the city of Mumbai. ``It's a defensive move.''
Besides the main commercial center of Mumbai and the country's capital New Delhi, the Hutchison Whampoa group holds controlling stakes in mobile operators in Calcutta, the third largest Indian metropolis, and the western province of Gujarat.
Confusion
The government's new guidelines for fixed-phone services have thrown India's six-year-old cellular service industry into disarray.
Cellular operators fear that fixed-line phone companies with their lower tariffs could eat into their market, forcing them to offer niche services at premium prices.
These companies hadn't counted on competition from fixed-line operators and may now balk at putting in bids to expand operations. That could hamper the government's efforts to attract greater private investment in the telecommunications industry.
The Cellular Operators Association of India representing mobile phone companies has appealed to the Telecom Dispute Settlement and Appellate Tribunal, which hears telecommunications- related disputes, to prevent fixed-line operators from eating into the mobile services market.
Jan/30/2001 5:17 ET |
