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Sakon plans Indian JV, to invest $10.4 million

Partha Ghosh & Thomas K Thomas

The US-based telecom and Internet services provider Sakon LLP has proposed to set up a joint venture in India for offering wireless Internet services.

According to sources, the company is investing around $10.4 million for a majority stake of 74 per cent in the joint venture with an Indian company.

An application has been filed with the Foreign Investment Promotion Board.

The proposal, which has been sent to the department of telecommunications for clearance, is likely to be listed for the FIPB's next meeting, government sources said.

While the Indian partner, whose name is yet to be ascertained, will secure the spectrum and the required licensing, Sakon would bring the latest technology to provide cost-efficient and high-quality coverage.

Sakon's investment is among the first after the government recently announced its decision to raise the foreign direct investment limit from 49 per cent to 74 per cent for private companies providing Internet services.

The investment in the Internet sector is also significant because it comes at a time when the domestic Internet services industry in going through a rough patch.

However, with Internet telephony being made legal next year, the Internet services providers are gearing up to take advantage of the opportunity.

Sakon specialises in providing telecom services in developing countries of Africa, Latin America, South-east Asia and other markets where optic fibre is excessively expensive.

With an array of broadband services including high speed Internet access, virtual private networks, Voice over IP and video conferencing, Sakon is ideally placed to tap the Indian market.

Satellite services company Titan Corp has recently picked up a 19 per cent stake in Sakon.

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