AT&T bids $560m for cellular slice of India

The US telecommunications giant AT&T has bid $560m for three licences in India, one of the world's fastest growing markets for cellular phones. The bid reflects the rapid growth and potential profits in mobile telephone globally.

The licences, for the right to operate a mobile network for 10 years in the states of Karnataka, Gujarat and Maharashtra, will be granted by the end of September. The tender is part of India's telecoms deregulation programme, launched in 1991, which allows private-sector involvement in the domestic market for the first time. Foreigners as well as Indian companies have been invited to invest. Eventually, Indian officials hope the network will extend throughout the country.

Third-world countries have attracted increasing attention from US and European telecoms companies in recent years, as mobile markets closer to home reach higher levels of maturity. Even poor countries such as India, where a mobile phone can cost a year's average salary, have seen growth rates outstrip those in the West.

Thailand and the Philippines have also opened up their cellular markets, while fast-growing South-east Asian countries such as Singapore and Hong Kong already have a well developed cellular metwork.

According to telecoms analysts, the mobile phone market is an attractive alternative in those countries without an extensive trunk system.

Satellites have also helped power the development of cable services in India and other countries in Asia and Latin America. Viewed as an "intermediate" technology in the West, satellite broadcasting may be the only viable distribution system for programming in poor countries.

Creating a global cellular market in Western countries has been stymied by incompatible technologies. Emerging markets in the Far East and Latin America may help confirm a global standard, according to telecoms analysts.

A handful of US and European companies, led by the Odyssey consortium, are promising a global "personal communications system" that would link cellular telephone users around the world, using mid-earth orbit satellites. But such networks require local licences and are likely to take several years to develop.

In the meantime, leading telecoms companies have focused on traditional cellular technology. AT&T has been among the most active in bidding for stakes in overseas markets.

Its $560m bid for the Indian licences topped offers from three other consortia, including US West and groups from Sweden and Thailand. Licences for Andhra Pradesh and Tamil Nadu are also on offer.

Indian telecoms officials said that the runners-up would be invited to increase their bids in advance of a final award of the licences next month.