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Bharti to bid for 10-12 mobile licences

Unlisted Indian telecom group Bharti Enterprises plans to bid for up to a dozen new cellular licences in a bid to expand its footprint across the country, its chairman told Reuters in an interview.

Bharti is one of several private telecom groups keenly awaiting the auction for these licences due to be held in the next few months as it aims to become a dominant player in the fast-growing mobile phone market.

The New Delhi-based telecom group which already has some cellular interests also plans to boost its presence in the fixed-line business.

"We will bid for 10 to 12 new mobile licences and hope to win about four or five," group chairman and managing director Sunil Bharti Mittal said on Thursday. "We have also received letters of intent to set up fixed-line networks in eight states.

Of these we are committed to do four," he said.

He said the group had begun work on setting up fixed-line networks in New Delhi, Haryana, Tamil Nadu and Karnataka and was looking at the possibility of having a fixed-line presence in Kerala, Punjab, Maharashtra and Andhra Pradesh.

"Our ambition is to be a pan-India mobile player and have a strong fixed-line presence in selected states," Mittal said.

Bharti has cellular operations in New Delhi, Tamil Nadu, Andhra Pradesh, Karnataka and Himachal Pradesh. It also offers fixed-line services in Madhya Pradesh.

The group's business spans telephone handset manufacturing, Internet access and a V-Sat network in addition to its cellular and fixed-line telephony.

The group, which has grown its mobile business using a raft of acquisitions over the past six years, is placing its bets on the fourth cellular operator licences, expected to be awarded by August after a competitive bidding process, to grow in size.

India's mobile market is made up of 21 circles or zones that include four large cities and 17 circles categorised as A, B and C depending on subscriber potential.

The government has already carried out two rounds of licence auctions for private operators and awarded the third licence to state-run telecom giants MTNL and BSNL.

Built war chest

The group has built up a sizeable war chest of funds. In the past nine months, it has managed to attract over $1 billion from a raft of global investors.

Earlier this month, it sold equity worth $460 million in its main holding company Bharti Televentures to global investors including Singapore Telecom, Warburg Pincus, New York Life, AIF Funds Management and International Finance Corp.

Mittal plans to use these funds to help the group finance its growth plans in the cellular and fixed-line businesses, enter long-distance telephony and carry out acquisitions.

The new forays are expected to cost the group around $1.1 billion over the next two to three years. For this it has, in addition to the $460 million funding, another $150 million in surpluses and hopes to raise $200 million by listing Bharti Televentures later this year.

Mittal said the group was planning the IPO in October and the company would be listed in the domestic market. He said the group had recorded sales worth Rs 13 billion in 2000-01 and generated cash worth Rs 1 billion after providing for past losses.

Bharti is also implementing a 35,000 km nationwide optic fibre backbone for its foray into the long-distance telephony business.

Mittal said the project was expected to cost the group Rs 20 billion of which Rs 12 billion would be funded using loans and the rest through equity.

Bharti along with SingTel is also laying an undersea cable link connecting Bombay and Madras with Singapore.

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