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[Source: Wired News]
AT&T Buys Big into India Mobile-Phone Market
by David Lazarus
AT&T will invest US$1.5
billion in building a mobile-phone network
in India intended to draw at a least a
million subscribers in one of the world's
fastest growing telecom markets, the
company's Indian subsidiary announced
Wednesday. AT&T now claims only about
11,000 subscribers in the region.
"This investment marks our commitment to
the Indian market and the entire
Asia-Pacific region," said AT&T
spokeswoman Alice Nagle. "We're putting
our money where our mouth is."
The investment is being undertaken by
Birla-AT&T Communications, a joint
venture in which AT&T holds a 49-percent
stake and India's Aditya Birla group the
remainder. "It is our strategic intent to
build the country's largest cellular
network," Birla-AT&T CEO Kumar
Mangalam Birla told reporters in New
Delhi.
AT&T is the largest foreign investor in
India's telecommunications sector.
Birla-AT&T said it expects to see profits
from the mobile-phone network after four
years.
Birla-AT&T won a 10-year license to
operate its network in India's wealthiest
state, Maharashtra, as well as nearby
Gujarat and the Goa resort area on the
Arabian Sea coast. Not included in the
licensing arrangement is the city of
Bombay, Maharashtra's state capital and
India's financial center.
India, like many Asian nations, is on the
info-tech fast track, encouraging rapid
investment in advanced digital systems
and, in more remote areas, bypassing
analog technology altogether. Booming
demand for cellular phones is the driving
force in constructing network
infrastructure, not just because of their
value as status symbols but also because
of the unreliability of existing phone
services.
India has one of the world's lowest
telecom penetration rates, with only one
line per hundred citizens, compared to a
global average of eleven lines per hundred
people, according to a report released
Wednesday by market researchers Frost
& Sullivan. The market is expected to
grow by more than 44 percent over the
next three years, adding an additional 24
million phone lines.
"Wireless is a wonderful technology in this
case," Nagle said. "You don't have to put
the investment in land lines. It's much
quicker to implement and less expensive."
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