The Hindu Business Line : Aircel likely to get DoT nod for Delhi foray

The Chennai-based cellular operator, Aircel, is all set to foray into the lucrative Delhi circle with the Department of Telecom likely to clear its application for a licence. Aircel has applied for eleven more licences to create a pan India telecom footprint. Aircel will be the seventh operator to foray into the Delhi circle, which has more than six million cellular subscribers. All the national operators including Bharti Airtel, Hutch, Reliance Communications, Idea Cellular and Tata Teleservices have already rolled out their services in the national capital.

Aircel, which is owned by Malaysian telecom major Maxis Communications Berhad, will, however, have a tough time breaking into a market such as Delhi, which is more or less saturated with the tele-density touching 50 per cent. The company will have to bank on the heavy churn rate in the cellular segment rather than creating new markets of its own.

Companies such as Airtel and Hucth, which have been offering cellular services in Delhi for more than 10 years have a well entrenched brand following, with more than a million subscribers.

Aircel will, however, have the advantage of deploying the latest technology and may also leapfrog into the third generation services once the policy on 3G gets clearer.

Aircel can also take advantage of recent initiatives such as infrastructure sharing among operators and save on capital expenditure while setting up the network.

At present, Aircel's cellular services are operational in Tamil Nadu, West Bengal, Orissa, Assam, North East, and Jammu & Kashmir.

The company is in the process of launching mobile services in Bihar, Himachal Pradesh, Madhya Pradesh, Uttar Pradesh (East) and Uttar Pradesh (West). The operator has now applied for licences to offer services in Delhi, Karnataka, Andhra Pradesh, Gujarat, Kerala and Maharashtra among others.

Investments

Maxis Communications Berhad owns 74 per cent equity in Aircel and 100 per cent subscription of cumulative redeemable non-convertible preference shares in Deccan Digital Networks Private Ltd, the joint venture company incorporated in India holding the balance 26 per cent stake in the cellular company.

This effectively gives Maxis 99.3 per cent economic returns from the investment in Aircel as per official information recently released by Maxis Berhad.

The company has also lined up over $1 billion worth of investments this year for expanding its operations in the country through Aircel.

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