3GSM: India News Roundup

The announcement of Vodafone Group plc (NYSE: VOD)'s Hutchison Essar acquisition on Sunday, hours before the start of the 3GSM World Congress in Barcelona, set the stage for a flurry of India-related developments this week.

The $11.1 billion Vodafone deal, which highlighted the extent of foreign interest in India’s telecom market, helped boost demand for shares in Idea Cellular Ltd. as it opened its $500 million IPO for subscription Monday. (See Vodafone Wins Battle to Buy Essar and India's IDEA Sets IPO Date.) The share offering closed yesterday and was oversubscribed more than 57 times, ahead of the mobile operator's listing on the National and Bombay Stock Exchanges.

Tanla Solutions Ltd. , which went public in December, said at 3GSM that it will use some of the $95 million raised to expand its OSS subsidiary Tanla Mobile into international markets. (See Tanla Plans Expansion.) Tanla Mobile operates in the U.K. as well as India, providing billing, CRM, and content delivery for premium messaging and 3G services.

Alcatel-Lucent (NYSE: ALU) had some news from its Indian operations as well this week. Through its partnership with local vendor ITI Ltd. , the vendor has been awarded a pair of deals from the two state-run operators -- Bharat Sanchar Nigam Ltd. (BSNL) andMahanagar Telephone Nigam Ltd. (MTNL) -- for 2 million mobile lines each. (See Alcatel-Lucent Wins in India.)

Its 60 million-line expansion plan delayed by a Motorola Inc. (NYSE: MOT) lawsuit, BSNL is patching up its over-extended network by awarding follow-on contracts to the vendors that won the first phase of its buildout. (See Court Delays Cost BSNL Millions.) In addition to the ITI order, the carrier is spending $250 million on 4 million GSM lines from Nortel Networks Ltd. , Ericsson AB (Nasdaq: ERIC), and Nokia Corp. (NYSE: NOK) -- which the original contracts stated could receive additional orders of up to 20 percent of their value.

Alcatel-Lucent also announced the completion of a mobile WiMax field trial using licensed spectrum belonging to Aircel Ltd. . (See AlcaLu Completes WiMax Trial.) The vendor opened a WiMax research lab in Chennai in November, in its joint R&D facility with the Centre for Development of Telematics (C-DOT) . (See Alcatel, C-DOT Open Center.)

Most of the major telecom equipment vendors have pledged investment and venture capital dollars for startups in India, and now there's a fresh source of cash: Nokia Growth Partners has created a $100 million "Fund of Funds" that will invest in VC firms operating in emerging markets, with the emphasis on India and China. Nokia Growth Partners, which has a $100 million kitty for direct investments, also says it will increase its own activities in those countries. (See Nokia Adds to VC Fund.)

Mobile payments and other financial applications have been touted as "killer apps" for emerging markets, and in that vein the GSM Association (GSMA) has launched a pilot project with MasterCard and a group of 19 mobile operators to allow expats to transfer money to friends and family back home using mobile phones.

Under the program, the GSM Association and MasterCard have set up a global hub linking mobile operators' payment systems with local banks. Customers of participating operators can set up international money transfers from their mobile handset, and recipients are sent a message via their phones when the money arrives.

In India, Bharti Airtel Ltd. (Mumbai: BHARTIARTL) is working with the State Bank of India to pilot the scheme, which has already seen success in villages where there are no bricks and mortar banking facilities available. (See Bharti Pilots Money Transfer.) India is the world's biggest recipient of overseas money transfers, racking up $25 billion a year -- 10 percent of the global market.

A similar pilot is underway in Kenya, where Safaricom Ltd. has launched a mobile payment service developed by Vodafone. (See Safaricom Intros M-PESA.)

— Nicole Willing, Reporter, Light Reading