Business | Telecoms
Swan Telecom gets licences
Swan Telecom, a new Indian telecom venture in which etisalat acquired a 45 per cent stake for $900 million last week, has received clearance from India's Department of Tele-communications to offer a complete array of telecommunications services.
- By Babu Das Augustine, Banking Editor
- Published: 00:02 September 28, 2008
Dubai: Swan Telecom, a new Indian telecom venture in which etisalat acquired a 45 per cent stake for $900 million last week, has received clearance from India's Department of Tele-communications to offer a complete array of telecommunications services.
Company sources said yesterday that Swan has clearance to operate national and international long distance (NLD and ILD) services. It has also got clearance to provide mobile, fixed-line and internet services.
With a significant stake in Swan Telecom that has licences for 13 circles, etisalat is expected to gain a strong foothold in the Indian telecom market.
Swan officials on Saturday confirmed that the company has got the licences.
etisalat did not comment.
Quoting company sources, India's Economic Times reported yesterday that Swan Telecom will get into tie-ups with existing NLD operators in India and use the existing infrastructure rather than build its own.
Currently, all leading Indian telecom companies hold NLD and ILD licences, while some such as Bharti Airtel and state-owned telecom firms BSNL and MTNL also function as Internet Service Providers.
International firms such as Orange, AT&T, British Telecom, Cable & Wireless and Verizon offer national and international long distance services in India.
Meanwhile, the price etisalat paid for its stake in Swan Telecom has kicked up a row in India. The Indian Government is facing flak for the valuations at which it sold off telecom licences to new players earlier this year. etisalat paid $900 million for a 45 per cent stake in Swan Telecom, but analysts and industry players now say the government sold these lic-ences at far below their market value.
Based on the price etisalat paid for the Swan stake, the company is now valued at $2.2 billion.
In January this year, six new telecom operators, which were given the Unified Access Service Licence (UASL) to run pan-India mobile networks, collectively paid $1.8 billion for these licences. These are now valued at nearly $15 billion.
In a letter to the Indian Prime Minister, Rajeev Chandrasekhar, member of Parliament and president of the Federation of Indian Chambers of Commerce and Industry, said: "The transaction (Swan-etisalat deal) clearly established irrefutable evidence that the government's pricing for the spectrum of 4.4 MHz was far lower than the actual market value causing considerable loss to the exchequer."
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