The Indian government has received about 300 applications from about 30 companies vying to tap growth potential in the world's hottest wireless market, the telecoms minister said on Wednesday.
India, now adding about 8 million mobile users every month, is forecast to top 500 million subscribers in five years, from 200 million now, making it an attractive market for investment.
We have received around 300 applications from 20 to 30 firms, the minister, Andimuthu Raja, told reporters, but he declined to say how many firms would receive the go-ahead to start mobile telecoms services.
The telecoms ministry set Monday as the deadline for applications for new licences, and has set up a committee to scrutinise applications. Analysts say it will take several months before the government makes its choice known.
The local telecoms market, which has been boosted by the cheapest call rates in the world and rising income levels, is divided into 23 zones and applicants are allowed to seek licences for some or all of these.
New applicants range from real-estate firms such as DLF, Unitech and Parsvnath Developers to diversified Videocon Group.
With a mobile telephone density of 18 percent in the country, the sector offers huge opportunity to any new player. But it remains to be seen how many of them would be long-term players, said Angel Broking's sector analyst Harit Shah.
While large and medium-sized cities are now well covered, firms are looking to push ahead aggressive rural expansion programmes to sustain growth rates.
He said the market share of incumbent carriers such as Bharti Airtel Ltd, India's top mobile services firm, might be squeezed by the entry of new players.
Existing GSM operators want the government to give them preference as many have had applications pending since December 2006, when the government last issued licences, but the minister said he would meet their representatives to discuss the issue.
They should not be aggrieved by the order going to be passed by us, Raja said.
Citi Investment Research said in a recent report that non-telecoms companies are vying for a share of the growing mobile telecoms market in Asia's third-largest economy because of easier foreign investment rules.
India's mobile telecoms firms, long ignored by global carriers battling on their own home turf, are now being wooed by Western companies that are allowed to own up to 74 percent stake in a mobile services joint venture.
U.S. phone company AT&T Inc. said on Monday its Indian unit had applied for licences to provide services in India in association with its local partner Mahindra Telecommunications Private Ltd.
Vodafone Group Plc, the world's second-biggest mobile firm, earlier this year paid $11.1 billion for a controlling stake in Hutchison Essar, since renamed Vodafone Essar, from Hong Kong-based Hutchison Telecom International.
The minister also said India's military would vacate by the end of November part of the telecoms frequencies assigned to it, freeing space for commercial wireless use.
India has been starved of operating frequencies as vast swathes of spectrum are occupied by the defence services.
(Additional reporting by Sumeet Chatterjee in Bangalore)