BT gets phone licenses in India

BT Group has been granted licenses to provide national and long-distance services in India as it seeks to carve out a bigger piece of the country’s burgeoning telecoms market.

The licenses from India’s Department of Telecommunications allows BT’s newly formed joint venture, BT Telecom India Pvt. Ltd., to sell services directly to corporate customers in India, BT said on Wednesday. Until now the company has been offering the services through an agreement with a local service provider.

BT will offer virtual private network (VPN) services using technologies such as multi-protocol label switching (MPLS) and ATM (asynchronous transfer mode), it said.

Multinationals providers including Verizon Communications have been applying for licenses to operate national and long-distance services in India. Two years ago the government increased the stake that a foreign company can hold in Indian telecoms provider, from 49 percent to 74 percent, which made investment more attractive. It also reduced license fees.

India’s booming telecoms market has been attracting investments to the country. In February, Vodafone Group announced an agreement to acquire a 67 percent interest in Indian mobile services provider Hutchison Essar. It hopes to cash in on India’s mobile market, which is adding more than 6 million subscribers a month.

A key opportunity for BT and other multinational providers is to offer services to the Indian operations of multinational companies, as well as to India’s growing outsourcing industry.

AT&T’s majority-owned joint venture, AT&T Global Network Services India Pvt. Ltd., was awarded national and long distance licenses by the government last year.

BT set up its Indian joint venture, in which it holds 74 percent of the equity, last year. Then in February it announced that it had signed an agreement to acquire i2i Enterprise Pvt. Ltd., an enterprise services company based in Mumbai that specializes in IP communications services.

In September BT said it expected revenue from India to be $250 million by 2009, and that it would increase its headcount in the country by 6,000 within two years. The company signed a five-year outsourcing contract in December with Tech Mahindra to support BT’s managed services for businesses around the globe, as well as BT’s internal systems. It owns a minority share in the outsourcing company.