AT&T eyeing stake in Videocon's telecom subsidiary Datacom

17 March 2008

Leading US phone company AT&T Inc is said to be eyeing a stake in Datacom Solutions Pvt Ltd, the telecom arm of Videocon Industries Ltd, which has recently been issued a license to offer mobile services across India, after it paid the required fees of Rs1,658 crore and bank guarantee of Rs882 crore.

The US company is likely to sign up as a strategic partner in Datacom, which has been issued a license but like other new licensees, is awaiting the allocation of spectrum. A deal between AT&T and Dataone is expected to materialise only after the government allocates spectrum.

Datacom, which expects spectrum allocation for for 19 circles, apart from Delhi and Mumbai, had recently announced an investment of Rs6,000 crore to set up a pan-India network to commence mobile operations by the end of 2008.

Videocon says it plans to use its extensive all India dealer network of over 10,000 to reach out to the customers and expects to have 10 million subscribers (on conservative basis) in three – four years of launch.

Induction of a strategic partner is essential as building a pan-India network is likely to involve an investment of over $5 billion (over Rs20,000 crore). Dataone has also been approached by Telephonica of Spain,

If the deal goes through, this would be AT&T's second innings in India's growing cellular mobile services, after it pulled out of the joint venture with Birla, AT&T and Tata Telecom, Idea Cellular.