Verizon enters India's long-distance telecom market

Verizon Business, a unit of U.S. communications service provider Verizon Communications, has applied for a license to provide international long-distance services in India. The move reflects Verizon's recognition of the growth potential of Asian markets, Verizon Business said Wednesday.

Leading multinational telecommunications services companies have applied for licenses to operate national and long-distance telecommunications services in India, to take advantage of a new policy that liberalized direct foreign investment in telecommunications services companies.

Before the new policy, some multinational telecommunications services companies including Verizon were offering services in India through cooperation agreements with local licensed service providers.

New government rules, announced in 2005, allow companies with foreign ownership of up to 74% to offer telecommunications services in the country. Before this rule, foreign investment was limited to 49%, which deterred foreign carriers from setting up operations in India.

AT&T Inc.'s majority-owned Indian joint venture, AT&T Global Network Services India was awarded licenses last year by the Indian government to operate national and international long distance telecommunications services from the country. AT&T holds 74% of the equity in the joint venture.

BT Telecom India, an Indian joint venture of BT Group, applied to the Indian government in November for licenses to provide national and international long-distance services. The government awarded it letters of intent in December, as a first step to the award of licenses.

As part of its expansion in India, BT announced Tuesday that it has signed an agreement for the acquisition of i2i Enterprise, a Mumbai-based enterprise services company specializing in IP communications services for Indian and multinational companies. The acquisition would be through its Indian joint venture, BT said. I2i already has licenses to provide international and national long-distance services, Internet services, and Internet telephony services.

Verizon is planning to offer its telecommunications services to multinational companies that are expanding in India, as well as Indian companies expanding abroad. It has set up a joint venture, Verizon Communications India, with India's Leo Communications, a part of the Videocon Group of Mumbai. Verizon will hold a 74% stake in the joint venture, while Leo will hold the balance 26%.

Verizon Business is one of three operating units of Verizon Communications, and delivers IP, data, voice and wireless services to large business and government. In India, Verizon Business plans to offer a full range of services to multinational customers, including MPLS, international private leased circuits and IP VPNs.

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