Shyam Tele gambit may not hit Bharti's Rajasthan plans

Shyam Telecom's counter-offer to the Canada-based Telecasted International Wireless Inc (TIW) to buy out its 27.5 per cent stake in Hexacom India Ltd is unlikely to come as a setback for Bharti Tele-Ventures' plan to enter the Rajasthan mobile market.

This is because Bharti still had the option to take a new licence or pick up the 34 per cent stake held by Telecommunications Consultant of India Ltd (TCIL) in Hexacom.

Shyam Telecom had exercised its first right of refusal to Bharti Tele-Venture's offer to pick up TIW's stake in the mobile company for Rs 102 crore.

Rajiv Mehrotra , chairman, Shyam Telecom, said, "The offer to TIW will be the same as made by Bharti."

While this puts paid to Bharti's plans of making fast inroads into the Rajasthan mobile market, an industry source said that this was no setback since Bharti has the option of converting its letter of intent (LoI) to take a unified licence for the state.

"They already have an LoI for the circle and we may pursue that path," said the industry source.

Sources said Bharti also had the option of picking up stake in Hexacom by picking up TCIL's shares.

TCIL has already sort permission from the government to divest its stake in mobile company.

Hexacom operates a GSM network in Rajasthan under the brand name Oasis and has a 48 per cent market share with over 200,000 customers.

The acquisition would have enable Bharti to get a foothold in Rajasthan and take its nationwide cellular operation to 16 circles.

Telecom analysts said that if the deal had come through Bharti was certain to bid for TCIL's stake giving it a majority stake in the company.

In that scenario, Bharti would got a readymade network with over 2 lakh customers and a presence in Rajasthan overnight.

If the company chooses to make an entry into the state by taking a fresh licence it will have to start from the scratch in setting up the network and acquiring subscribers.

Industry sources, however, pointed out that one advantage that the company would get from acquiring a fresh licence is that it would still get spectrum in 900 MHz band.

"Since there is no third operator in the state Bharti would get spectrum in the 900 MHz range compared with 1800 MHz given to other new licence holders," said an industry source. 900 MHz band is considered to be technically superior.