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Building assets outside the "home" country is an accepted business strategy worldwide –­ it allows companies to hedge risks and maintain margins. Of late, the Indian telecom market for instance, has attracted several overseas operators including AT&T, Cable & Wireless, Verizon Wireless, Vodafone, Hutchison Telecom International, France Telecom, British Telecom and Etisalat.

Most of these ventures have paid off. AT&T, which has bagged contracts from companies like Wipro, has upgraded India to a separate business unit (it was earlier clubbed with the South Asia region), and Vodafone Essar has overtaken Bharat Sanchar Nigam Limited to become the third largest mobile operator in the country.

Domestic telecom companies too have forayed into overseas markets. Service providers like Bharti Airtel, Tata Communications and Mahanagar Telephone Nigam Limited (MTNL) have launched operations in the Channel Islands, South Africa and Mauritius respectively. Such ventures have earned them more than just revenue and brand recognition. They have gained access to a whole new set of subscribers and their needs. These service providers have enjoyed the challenge of rolling out networks and introducing new services and products for specific markets catering to specific consumer needs. tele.net takes a closer look at the international operations of leading domestic service providers...

Bharti Airtel
Bharti stepped on to the global expansion path in 1998, when it launched mobile and basic telephone services in Seychelles through the Bharti Group's subsidiary, Telecom Seychelles. Since then, the company has introduced operations in the Channel Islands of Jersey and Guernsey and intends to start 2G and 3G GSM services in Sri Lanka in December 2008. The company also bid for mobile licences in Kenya, Bhutan and Gibon, but remained unsuccessful.

Bharti's entry into Seychelles increased competition in the state, then monopolised by the incumbent, Cable & Wireless. The two companies have managed to increase the mobile density in the island nation to around 113 per cent (August 2008). In December 2006, Bharti was the first of three operational telecom service providers in the islands to launch 3G operations.

The service provider initiated its second overseas venture in the Channel Islands, France, in 2006, having obtained a licence to run comprehensive telecom services in Jersey including 2G, 3G and long distance. Further strengthening its presence in the Channel Islands later that year, the company bagged 2G and 3G mobile licences in Guernsey.

Jersey Airtel and Guernsey Airtel (subsidiaries of Bharti Enterprises) currently provide services in the islands under the Airtel-Vodafone brand. The two companies, which are tough competitors in India, provide services in partnership in the islands.

Bharti has recently acquired 2G and 3G mobile licences in Sri Lanka and intends to launch services in December 2008. The company is seriously targeting the market and has signed a $100 million investment agreement with the Board of Investment of Sri Lanka to begin operations and roll out passive infrastructure. This is part of the company's two-part agreement with the board, which states that Bharti will invest $200 million in Sri Lanka over the next five years. Bharti has also recently outsourced all its IT requirements in the country to IBM.

Sri Lanka will be a tough market to break into, as the island's top mobile operator, Dialog Telekom, dominates the market with over 55 per cent share (as of September 2008). The island also has a mobile penetration rate of over 45 per cent. However, for now, the main obstacle in the company's way is its inability to put in place interconnect agreements with the four other GSM mobile operators on the island (Dialog, Mobiltel, Millicom International Cellular and Hutch). Nevertheless, according to a Bharti spokesperson, "Our launch preparations for Sri Lanka are progressing well and we hope to launch mobile services by the end of this year."

Tata Communications
The winning formula for Videsh Sanchar Nigam Limited (the earlier avatar of Tata Communications) in effecting a turnaround was to go global. Tata Communications has now targeted the South African telecom market in a big way. The service provider has acquired 56 per cent stake in Neotel, South Africa's second national fixed line operator.

Neotel, founded in August 2006, launched business and consumer services in November 2007 and May 2008 respectively. The company was the first major competitor to the national incumbent, Telkom.

While Tata Communications initially owned only about 26 per cent in Neotel, it recently entered into an agreement with South African state-owned enterprises Eskom and Transnet to acquire their 30 per cent stake in Neotel for an undisclosed amount (taking Tata's total stake in Neotel to 56 per cent).

Neotel is currently on an expansion spree. The service provider has acquired the telecommunications division of Transnet, called Transtel, for Rs 250 million. The takeover will not only enable Neotel to access the South African enterprise market but will also provide the Tatacontrolled company with a platform for introducing next-generation services for businesses. The Transtel takeover is estimated to supplement Neotel's annual revenues by Rs 3 billion and the company's network by 700 km of metro fibre.

Neotel has also launched Wi-Max services in July 2008 for enterprise customers. (The complete deployment of a Wi-Max network in Macedonia is expected to be completed by December 2009.) To fund its future initiatives and expansion plans, Neotel is reportedly seeking to raise $1 billion, mostly in debt. Along with Tata Communications, Neotel is engaged in discussions with Nedbank Capital, Investec Bank, the Development Bank of South Africa and the Industrial Development Corporation of South Africa, as well as banks in India.

Neotel seems to have established a firm standing in the South African telecom market. It is especially strong on the enterprise services front and has reportedly signed deals worth $205.1 million with around half of the country's 350 corporate customers. In the future, according to a company spokesperson, "Neotel's core focus will be network expansion for data businesses and converged IP solutions for enterprises and end consumers. Neotel has investment plans of approximately Rs 11 billion."

MTNL
For MTNL, perhaps, overseas expansion makes the most sense. The service provider is present only in two circles and that too, in saturated metros. In line with this, the public sector unit established operations in Mauritius and Nepal sometime back.

Mahanagar Telephone Mauritius Limited
In 2004, MTNL set up a wholly owned subsidiary, Mahanagar Telephone Mauritius Limited (MTML), for providing basic, mobile and international long distance (ILD) services as the second operator in the country.

The company got off to a good start, providing ILD services, which generated Rs 4 million per month. Since then, it has expanded to providing CDMA-based fixed line and mobile services. Its financial performance has also been improving steadily. MTML's turnover increased from Rs 169 million as of March 2007 to Rs 188.8 million as of March 2008. Similarly, its profit after tax increased from a negative of Rs 9.09 million to a positive of Rs 0.98 million during the period under review.

United Telecom Limited
In Nepal, MTNL has launched operations in conjunction with Telecommunications Consultants India Limited (TCIL), Tata Communications and Nepal Venture Private Limited. It provides basic telephone services based on WLL technology. In a significant development for Nepal, in mid-2007, the company received the Nepal Telecom Authority's approval to start voice over internet protocol services. This technology substantially reduced ILD call rates in Nepal.

Reliance Communications
Reliance Communications (RCOM) has also entered the international arena. Recently, it has reportedly formed a 74:26 joint venture (JV) with Sri Lanka-based Electroteks to launch GSM mobile services in the country by the end of 2008. The JV, Reliance Mobile Lanka, has received start-up GSM spectrum and the access code from the Sri Lankan authorities. The new venture targets the setting up of a network with a capacity of 5 million GSM lines. RCOM has invited expressions of interest from global vendors for buying GSM lines in Sri Lanka. It intends to invest Rs 12 billion in the JV in the next three years, to set up a nextgeneration integrated telecom network.

All in all, there is no doubt that with over 700 million subscribers waiting to be tapped in India, there is no place like home. However, for domestic companies with overseas operations, it is definitely a case of cashing in on the benefits of having beachfront property in island locations.

Telecom Seychelles
Ownership: Wholly owned subsidiary of Bharti Group. Promoters –­ Bharti Airtel and Mauritius-based Emtel
Services launched: 1998
Services offered: Comprehensive telecom services including GSM (2G and 3G), fixed line, internet, fax and data, international roaming, international maritime telecom services and international collect and credit card calling
Key competitors: Cable & Wireless, MediaTech International

Jersey Airtel and Guernsey Airtel, Channel Islands, France
Ownership: Wholly owned subsidiaries of Bharti Global
Services launched: Jersey Airtel, June 2007; Guernsey Airtel, March 2008
Services offered: 2G and 3G GSM mobile
Key competitor: Cable & Wireless

Bharti Airtel Lanka
Ownership: Wholly owned subsidiary of Bharti Airtel
Services launched: Likely to begin GSM services in 2009
Services offered: Will offer 2G and 3G GSM mobile services
Key competitors: Dialog, Millicom International, Mobiltel and Hutch

Neotel, South Africa
Ownership: Tata Communications 56 per cent, South Africa's Nexus 19 per cent, CommuniTel and two telecom consortia 12.5 per cent stake each
Services launched: Business and consumer services launched in November 2007 and May 2008 respectively
Services offered: Fixed line, leased line, national converged voice and data, metro ethernet, solutions for SMEs
Key competitors: Telkom SA (incumbent and largest competitor), MTN, Verizon South Africa

United Telecom, Nepal
Ownership: Promoters –­ MTNL 26.8 per cent, TCIL 26.6 per cent, Tata Communications 26.6 per cent, Nepal Ventures 20 per cent
Services launched: 2003 Services offered: Fixed line and internet
Key competitor: Nepal Telecom

Mahanagar Telephone Mauritius Limited
Ownership: Wholly owned subsidiary of MTNL
Services launched: Received licence in January 2004
Services offered: Basic, mobile and ILD
Key competitor: Mauritius Telecom (rebranded Orange in August 2008 as France Telecom owns 40 per cent stake in company)