AT&T to re-enter telecom in India

AT&T Inc is planning to re-enter the Indian telecom market through a joint venture with Mahindra Air Services.

The venture, 74 per cent owned by AT&T Global Network and 26 per cent by the Indian partner, will offer Internet, international long-distance and national long-distance services.

The new company will be called AT&T Global Network Services India and AT&T will invest Rs 18.50 crore in the business initially as its equity contribution.

This will be AT&T's second innings in the Indian telecom services market. AT&T Wireless had a 33 per cent stake in Idea Cellular Services along with the AV Birla Group and the Tata Group. The stake was sold in 2004.

As per the company's new plans, it will have a service mark agreement with AT&T Inc of the US to use the AT&T brand. The Indian company will pay a royalty fee of $5,000 initially and 4 per cent of the annual sales subsequently.

The new company will also offer services like global networking and broadband services, video multicasting and global scheduling.

According to government sources, the company has applied to the Foreign Investment Promotion Board (FIPB) for its permission to invest in the Indian telecom business.

As per the present policy, foreign direct investment upto 74 per cent is permitted in the business the company plans to enter. FDI upto 49 per cent is allowed in the telecom services through automatic route and upto 74 per cent with the permission of the FIPB.

In addition, the present policy also permits 100 per cent FDI in ISPs, without gateways, infrastructure service provider companies, electronic mail and voice mail services.