Videocon to start telecom services from August; may tie up with Middle East firms
22 May 2008
Home-grown consumer electronics giant Videocon will be the next big entrant in the world of telecom when it rolls out its services from August this year, as group chairman Venugopal Dhoot said on Wednesday.
Moreover, he has ambitious plans for this enterprise, aiming to capture 10 per cent of the Indian telecom market in five years. He also said that Middle Eastern telecom firms Emirates Telecommunications Corp (Etisalat) and Qatar Telecom has approached his firm for tie-ups in India.
"We are aiming for 50 million in five years," he said. India has more than 260 million fixed-line and mobile users and has set a target of 500 million by 2010. He was speaking at an interactive session on ''India Inc.-Vision 2020? at New Delhi, and declared the start of Videocon telecom services in Chennai on 15th August, on the occasion of Independence Day.
''We have got the spectrum in Chennai, and will roll out our mobile service from Aug 15 this year, and will later move to states like Karnataka, Kerala and Orissa,'' he said, adding that the company's foray into the telecom sector would cover 22 circles in India, each co-terminus to a state, for which licences have already been acquired.
For its marketing network, Dhoot would initially depend on the existing dealers and retail outlets dealing with Videocon products. ''There are 40,000 dealers dealing with Videocon products and around 400,000 retail outlets across the country. They will sell mobile chips,'' he said.
UAE's Etisalat, the Arab world's second-biggest telecoms firm, had said in April it could spend up to $4 billion on an acquisition or a licence to enter India, the world's fastest growing telecom market.
"There is interest from Middle East firms. Etisalat, Qatar Telecom have approached us," Dhoot said, adding Videocon has appointed investment bank Morgan Stanley to advise it on any possible deal.
Indian law permits a maximum of 74 per cent foreign holding in telecoms. Vodafone Plc, Russia's Sistema and Singapore's SingTel have bought substantial stakes in Indian telecom firms, attracted by a market that added more than 10 million wireless users in March.
Dhoot declined to say how much investment would be made in the telecoms business.
Videocon is an industrial conglomerate with interests all over the world and based in India. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico. It is also the third largest picture tube manufacturer in the world.
Last year, it reported an annual turnover of $ 4.1 billion, making it one of the largest consumer electronic and home appliance companies in India. Since 1998, it has expanded its operations globally, especially in the Middle East. It now mainly operates in three sectors of consumer electronics, colour picture tubes and oil and gas exploration.
