Processing .....please wait.. 
The article has been forwarded.... 
Asian telecom majors march to India
By siliconindia
|
Wednesday, 15 October 2008, 16:27 IST
Mumbai: Indian mobile market is being preferred by major telecom operators in Asian region and they are focusing towards India to get a share in the growing Indian market while operators from Europe and America are tighten their plans as the crisis in western economies made them highly risk-averse and hesitant to bet big money on a long-gestation sectors in new markets.
Many major Asian operators such as Japan's NTT DoCoMo, UAE's Etisalat, Bahrain Telecom Egypt's Orascom and Saudi Telecom are now looking to enter Indian market.
The early movers in global telecom were companies in the U.S. and European markets. Observers believe high saturation levels in the western markets are pulling down revenues and reducing the ability of operators to pursue any big ticket acquisitions or partnerships.
"Given factors like rising subscriber numbers and profitability, access to technology and skills in operating telecom businesses, western operators were the natural strategic partners for upcoming companies in the early stages of the Indian telecom evolution," Enam Investment Banking head (telecom & media) Salil Pitale told The Economic Times.
Financial crisis and poor market performance made huge losses to many of the top operators in the west. While Telecom Italia's net profit was down 26.6 percent year-on-year during the first half of 2008, France Telecom saw 18 percent drop in the figure. Deutsche Telecom also reported a three percent decline in income to euro 30.1 billion.
Pitale further added "As these markets matured, and as some of the European companies put in a lot of investment in 3G licenses, their profitability and cash flows came under pressure. This more or less coincided with the time when some of the Asian players started showing fantastic growth in their respective markets - some of them have become large, experienced and profitable enough to contemplate growth in markets beyond their home territories."
While western operators struggle to earn from market, Asian players continuously make profits. For Instance, Etisalat's net profit grew 37 percent during the period with a revenue increase of 24 percent.
"If European telcos had not focused on 3G in the nineties, they could have gone into Africa, China or India and created huge valuations. Irrational 3G bids have affected these operators. Only in the last five six years we have seen the revival of these telcos," said Prashant Singhal, Ernst & Young India telecommunications leader.
