VCCircle

As a major round of consolidation ended in Indian telecom business with the recent sale of Hutchison-Essar to Vodafone, we all thought, that is the end of it. Not really. It only marks the second wave of great Indian telecom rush. At least 13 companies have applied for fresh telecom licences for operating mobile services nation-wide, according to a report in Business Standard.
They include all four major real estate companies: Unitech, Parsvanath, DLF and Indiabulls Real Estate. Shyam Telelink, in which Russia's Sistema has picked up stake, has also applied for nationwide licences. Shyam currently provides fixed line and city mobile service in Rajasthan circle.
The others who have rushed to file applications for licences are some of the existing players like Reliance ADAG-backed Swan and Cheetah Telecom, HFCL (it currently provides fixed line and broadband service in Punjab circle), and the Essar Group-owned BPL. Th Economic Times reports that Videocon is also applying for the licence probably in partnership with US telco Verizon (that is a coup!). CNBC TV18 reports that the Hindujas are making another entry by applying for fresh nationwide licences. This is the second life for Indian telecom business.
Why the sudden rush? For one, the government has said it will not receive any applications for fresh telecom licences after October 1. Second, the government may allocate spectrum to the telecom players on a first cum first served basis. Third, nationwide telecom licences will cost only just Rs 1,600 crore ($400 million), which is peanuts compared to the valuations the existing players are enjoying in the market.
But it remains to be seen how many of the fresh applicants can build viable telecom businesses. I am unlikely to apply for a fresh mobile phone service from Parsvanath, Unitech or a DLF unless they have a game changing business plan. If it's all about spectrum-squatting, and if the idea is to flip licences to a bigger international player at a later stage, then there is something wrong with the telecom policy. The main refrain of the existing telecom players are that they do not have enough spectrum to provide high quality mobile service (currently, call drops, congestion are order of the day).
Hope we do not end up like the first round of telecom rush where several serious and non-serious players submitted bids and finally led to a huge telecom mess, corruption charges etc.