Real estate major Parsvnath to foray into telecom biz

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According to sources close to the development, Parsvnath plans to offer GSM-based mobile services across the country and has applied to the Department of Telecom (DoT) for unified access services licenses in 22 circles.

The total cost of licenses across the country along with the bank guarantees can cost the company about $425 million, Parsvnath Chairman Pradeep Jain said.

It usually takes about $1 billion to roll out pan-Indian services, he said.

The company, which has reportedly entered into a joint venture with a foreign business partner, plans to offer GSM-based mobile services and various other services like IPTV, Wi-max, Internet and broadband, he said, adding the diversification into telecom business would be subject to obtaining necessary approvals.

"There is big potential in telecom services. This business will be conducted through a special purpose vehicle (SPV) promoted by me, local investors and a world-renowned telecom partner," Jain said.

"The reason we are getting a foreign partner is because we want them to take charge of operations," Jain said.

Without disclosing the name of the foreign partner, the chairman of the real estate developer said, "The SPV would be floated later for the operational purpose of the telecom services, in which Parsvnath and other companies will have stake."

"The business model is yet to be finalized," Jain said adding the SPV could be formed even before the government gives the licenses. The SPV would be registered in India.

"This is a great opportunity for the company to diversify into a new business area, which is continuously growing. Despite increasing number of subscribers, the penetration of mobile telephony in India is still low as compared to developed countries. As and when number portability is introduced, it would offer immense business opportunity to new entrants," Jain said.

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