Unitech joins telecom bandwagon

The country's second-largest real estate firm Unitech Ltd said it would apply to the Department of Telecom (DoT) for a countrywide telecom licence, a declaration that adds to long list of companies that have lined up to enter the lucrative Indian telecom services market.

This is the second instance of a realty firm foraying into telecom in less than a month. In August, Delhi-based Parsvnath Developers had submitted an application to the DoT for a Unified Access Service licence in 22 circles.

Unitech already has a telecom transmission tower manufacturing business, the details of which were not revealed by the company. "The continuous rapid growth in India's telephone services business indicates the enormous potential for future growth in this business. Further, it would help boost
the group's telecom and transmission tower manufacturing business. Thus, investment in this sector would provide immense potential for value addition to the group," Unitech informed the National Stock Exchange today.

The company’s board of directors today decided that eight of its wholly owned subsidiaries would apply to DoT for a "Unified Access Services" licence which allows an operator to run operations using a combination of telecom technologies, including CDMA or GSM. Once it is granted a letter of intent, Unitech will join other applicants for spectrum (the crucial radio-frequency that enables wireless communications) from the DoT.

"We are in talks with leading telecom players and also financial investors for partnership," said Sanjay Chandra, managing director, Unitech Ltd.
Unitech’s market-capitalisation at close of trade today stood at Rs 54,774 crore. In 2006-07, the company’s consolidated income stood at Rs 3,388.40 crore, with a net profit was Rs 1,305.5 crore.

The government is currently reviewing the policy on spectrum allocation and grappling with plans to introduce next generation high-speed mobile services in India. Since telecom licensing norms were changed in 2003 to allow for universal access (before this licences were dependent on the technology being used), the government has granted over 97 such licences.

A pan-India licence usually costs around Rs 1,500 crore.

Established in 1972, Unitech's’s land bank today stands at around 10,700
acres, with its portfolio includes residential, office and retail developments, hotels, amusement parks and special economic zones.