By Shabana Hussain
New Delhi: Parsvnath Developers Ltd, India’s fourth largest listed real estate firm, has said it plans to offer mobile phone and Internet services across the country, to tap a growing business. India is the fastest growing mobile telephony market in the world in terms of connections added per month.
The company is looking at partnering with a foreign telecom player to diversify into telecom. “We will partner with an international telecom player, but not an Indian player,” company chairman Pradeep Jain said. He, however, declined to name the company.
Parsvnath has applied for licences to offer telecom services in 22 circles across the country, the company said in a statement to the Bombay Stock Exchange (BSE). This is the first time the company is diversifying outside the real estate sector. Parsvnath has a diversified portfolio of realty projects, including integrated townships, commercial complexes, hotels and special economic zones.
“Telecom is a growing sector, so it made sense for us to diversify into the telecom business,” Jain said. “Despite the increasing number of subscribers, the penetration of mobile telephony in India is still low when compared to developed countries.”
Currently, companies in India are allowed to bid for new mobile phone licences, but will get to provide the services only when the spectrum, or the airwaves on which mobile telephony runs, becomes available. India’s mobile phone services sector—which is more than a decade old—is dominated by about eight firms, including Bharti Airtel Ltd.
Parsvnath will find it far quicker to enter the Internet services business as it requires only a licence.
The telecom subscriber base in India was 225.01 million in June and the monthly mobile subscriber addition has been 6-7 million. In July, the country added a record 8.06 million mobile subscribers.
“This would be in line with their diversification strategy,” said HDFC Securities manager Mukesh Agarwal. “It (telecom) is also a high capital intensive business. They have the cash flows. And I think they must be keen on investing outside the real estate industry. The projects they have in the pipeline will take seven to eight years to complete. So, they want to look beyond their core business.”
In another announcement, Parsvnath said it has won a project to develop a bus terminal at Mahim in Mumbai. It will develop a plot of land at the bus station for commercial and residential use and remodel the station, Parsvnath said in a statement to BSE.
The project would give the company a developable area of 40,000 sq. ft with a realizable value of about Rs70 crore. Parsvnath had consolidated revenues of Rs1,534.50 crore and a consolidated net profit of Rs292.21 crore in fiscal 2007.