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Thomas K. Thomas

Lines up $1 b investments

Singapore , Oct. 20

Delhi and Mumbai mobile users are all set to have another mobile operator to choose from, with the Department of Telecom all set to grant licences for seven new circles to Maxis Berhad-promoted Aircel. The company, in a bid to become a pan India operator had applied for 11 new circles, which include markets such as Delhi, Karnataka, Maharashtra, Gujarat and Andhra Pradesh.

Aircel services

Senior DoT officials confirmed that the licences might be issued to the company within a few days. At present, Aircel's cellular services are operational in Tamil Nadu, West Bengal, Orissa, Assam, the North-East, and Jammu & Kashmir. The company is in the process of launching mobile services in Bihar, Himachal Pradesh, Madhya Pradesh, Uttar Pradesh (east) and Uttar Pradesh (west). The new licences will enable Aircel to compete with the likes of Bharti Airtel, Reliance Communications, BSNL and Hutch. The Chennai-based Aircel Ltd is the second company to go for a pan-India telecom licence in the last few months. The Aditya Birla Group-promoted Idea Cellular has also applied for 12 more new licences to add to its 11 circles.

The Malaysia-based Maxis Communications Berhad owns 74 per cent equity in Aircel and 100 per cent subscription of cumulative redeemable non-convertible preference shares in Deccan Digital Networks Private Ltd, the joint venture company incorporated in India holding the balance 26 per cent stake in the cellular company. This effectively gives Maxis 99.3 per cent economic returns from the investment in Aircel as per official information recently released by Maxis Berhad. Maxis has identified Aircel as one of its key investments in the region to get a foothold in the rapidly growing cellular market. Aircel already accounts for nearly 20 per cent of Maxis' telecom subscribers across the Asian market.

The company has also lined up over $1 billion worth of investments this year, for expanding its operations in the country through Aircel.

Wi-max tech

Recently, it had also announced investments to roll out Wi-max technology based wireless broadband services in Chennai. Market analysts pointed out that with six to seven operators already present in the Indian telecom market, Aircel will have to bank on creating efficient systems and a cost effective business model. While entering the market late will have its disadvantages, Aircel will be able to take benefit of the latest technologies right from day one instead of evolving through a migratory path taken by the incumbent players.

More Stories on : Regulatory Bodies & Rulings | Telecommunications

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