Videocon follows suit, ropes in US partner

Videocon, the Indian company with interests in consumer electronics and oil exploration, applied for a licence to sell telecommunications services in the world's fastest-growing wireless market.

The group has identified a US-based telecom company that would own a 26 per cent stake in the planned venture, Chairman Venugopal Dhoot said in a telephone interview today.

He declined to name the company. The new business would sell mobile-phone services nationwide.

Videocon joins Unitech and Indiabulls Real Estate in seeking licences before an October 1 deadline for applications set by the federal telecom department. India's record growth in wireless subscribers helped Hong Kong billionaire Li Ka-shing sell his stake in India's third-largest operator to Vodafone Group in May for $10.7 billion.

"There is scope for a few more players to enter the sector," said Dhoot today. "There is good opportunity because India is expected to be the second-largest telecom market in the world with 800 million users by 2015."

India, which has a population of 1.1 billion people, ended August with 201.3 million wireless subscribers after adding a record 8.31 million users in the month.

The growth exceeded the number of subscriber additions in China. More than four out of five Indians and over 95 per cent of residents in smaller towns and villages don't own mobile phones, according to government data.

Videocon Industries shares gained Rs 7.90, or 2.2 per cent, to Rs 373.50 at 1:02 pm today. They have declined 7.6 per cent over the past year, compared with a 38 per cent gain in India's benchmark Sensitive Index.