News: Hutch, Idea get nod for pan-India presence

(DNA 18/09/2006) New Delhi - Bharti Airtel, the only all-India global system for mobile communications (GSM) player, is set to face competition now. Applications filed by two other mobile service providers — Hutchison Essar and Idea Cellular — have been cleared by the government for operating across all 23 circles in the country. Both Hutch-Essar and Idea are GSM players.

Hutch-Essar, a joint venture between Hutch Telecom International Ltd (HTIL) and the Essar group, operates its mobile telecom services in 16 circles now. Hutch-Essar has also been permitted to operate its own national long distance (NLD) and international long distance (ILD) services, a Department of Telecommunications (DoT) source said. Hutch-Essar officials declined to comment.

Interestingly, the DoT nod for Hutch-Essar’s all-India presence has come at a time when Egypt-based Orascom has expressed interest to pick up a controlling stake in HTIL, which is a majority joint venture partner in Hutch-Essar. At present, Orascom has around 19% in HTIL, which translates into an indirect 10% stake in the Indian mobile venture, Hutch-Essar. According to sources, Hutchison Whampoa, the Hong Kong-based holding company for HTIL, is against selling a controlling stake in HTIL to Orascom. The National Security Advisor had written to the DoT saying that the Orascom stake in Hutch-Essar could be a threat to the country’s security as it has operations in Pakistan and Bangladesh.

It is learnt that Aditya Birla group’s Idea Cellular too has been granted permission to operate its mobile telecom services in all 23 circles. Idea already has licences for 11 circles and operates in 10 circles, the latest being Rajasthan. The company applied to DoT for the remaining 12 circles a few months ago. Recently, Idea got the licence for the Mumbai circle. Right now, it operates only in one metro-Delhi.

Besides Delhi, Idea has services in Haryana, UP (West), Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Kerala, Himachal Pradesh and Rajasthan.

While Bharti Airtel is the only GSM telecom player to be present across all 23 circles in the country, Bharat Sanchar Nigam Ltd (BSNL) is present in all circles except in Delhi and Mumbai, which are the territories of its sibling Mahanagar Telephone Nigam Ltd (MTNL). CDMA player Reliance Communications is present across 21 circles and the group’s GSM business Reliance Telecom operates in the remaining two circles of Assam and North-East, among other places.

Another CDMA player, Tata Teleservices, does not operate in J&K, Assam and North-East.

Among GSM players, Bharti leads in subscriber numbers at over 27 million, while Hutch-Essar has around 19.4 million and Idea over 10 million users.

There are a total of 23 geographical circles across the country. Besides the four metros, there are three circles-A, B and C. A circle constitutes places like Maharashtra, Gujarat and Andhra Pradesh; B circle like Kerala, Punjab and Haryana; and C circle like Himachal Pradesh, Bihar, Orissa and North-East.