The $32-billion US telecom major Sprint Nextel
Corporation is set to enter India by buying 74% stake in
a joint venture firm Sprint Telecom India floated with
BSE-listed software development company Persistent
Systems.
Sprint India will then provide STD, ISD and Internet
services with telephony along with advanced managed
network services to other telecom operators after it
obtains the neccessary licences from the department of
telecommunications. Sprint Nextel owns and operates
Sprint, the third largest wireless telecommunications
network in the US, with 51 million customers, behind
Verizon Wireless and AT&T Mobility. Sources said, Sprint
Nextel will buy 74% in Sprint India in two tranches
totaling to Rs 6.2 crore. The company has sought the
permission of the Foreign Investment Promotion Board
(FIPB).
For any foreign firm to operate in India’s telecom sector,
it needs to form a joint venture with a resident financial
partner who needs to own at least 26% stake in the
operating firm. And this is the reason Sprint Nextel has
formed Sprint Telecom India.
With this, Sprint joins the likes of Singtel, AT&T, Verizon,
BT, and Cable & Wireless that are active in India in the
enterprise communications space. Persistent generates
a quarter of its revenues from the telecom sector as a
bulk of its clients are telecom-specific software
providers and handset manufactureres.
According to sources, Sprint International’s investment
in Sprint India will be in two tranches. Sprint
International will first subscribe to 74% of the Sprint
India’s shares at face value. Persistent Systems will then
buy 26% in Sprint India. The JV entity Sprint Telecom
India will then obtain the neccessary licences from DoT
following which Sprint India will issue additional shares
(at a premium) to Sprint International totalling 74%. The
Sprint network operates a combination 2G and 3G
wireless network. In the US, Sprint’s data options
include Sprint TV, Sprint Radio Stations, Sprint Music
Store, Sprint On-Demand, unlimited web access, video
and picture mail, wireless chat and games.
Sprint also offers data packages including its expensive
Phone as Modem plan which allows customers to tether
their phone to a computer for use as a wireless modem.
Sprint also offers broadband for the home via Sprint
Mobile.
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