Telekom Malaysia eyes India

Telekom Malaysia plans to set foot in India through the Mobile Virtual Network Operator (MVNO) route. The company had last week picked up 49 per cent stake in Spice Communications Ltd for $ 178.8 million.

An MVNO service, available in Europe and the US, involves a marketing and branding outfit that owns neither a network infrastructure or spectrum but buys airtime from an existing mobile service provider.

Before exploring the MVNO option, which is currently not permitted in India, Spice, in its first phase of expansion, will launch mobile services in six telecom circles in India and will also apply for licenses to enter both the national and international long distance sector," Spice Chairman B K Modi told Business Standard.

Modi added that the deal would restructure the company and "help clean up all loans and defaults". "Our expansion plans have been put on hold until the restructure," he added.

Spice Communication currently has about 1.8 million subscribers and offers services in only two of the 23 telecom circles in the country.

Following the first phase, Spice Communications will look at the MVNO option to enter other circles. "We are also awaiting regulatory clearances to offer services across India through this facility," B K Modi added.

With a 49 per cent stake, Telekom Malaysia will have 3 representatives on the 9-member board of Spice Communication.

"The Modi group will also have three representatives and the remaining will be independent members. The new board will be in place by the first week of April," B K Modi said.

Richard Branson's Virgin Telecom too had planned to launch mobile services in India later this year as an MVNO operator but has not got approval as both the department of telecom and the ministry of finance are against this service.

The DoT is of the view that if allowed, MVNOs will only add to the infrastructure crunch in the mobile sector.