Saudi telecom firm launches Indian subsidiary

March 27th, 2008 - 9:43 pm ICT by admin  

Bangalore, March 27 (IANS) Saudi Arabia’s telecom major Etihad Etisalat has set up a wholly-owned subsidiary in India to outsource IT solutions and consulting services for its operations in the Middle East and North Africa (MENA), the company said here Thursday. “As our first overseas subsidiary, Mobily InfoTech India Ltd will provide IT services and enhance capabilities of Etisalat’s IT division by leveraging the Indian talent pool and domain expertise,” Mobily CEO and managing director Khalid Alkaf said in a statement.

The Saudi firm will invest about Rs.700 million ($17.5 million) over the next three years in the technology development centre in Bangalore. It also plans to have a research and development centre in the near future. The investment in the first year of operations will be Rs.200 million.

“We will have more skilled manpower in our IT division to execute projects for our parent company within the deadlines. By operating in different time zones, we will provide services to Etisalat on 24×7 basis. We will have about 30 percent cost advantage over other players in the telecom segment,” Alkaf averred.

Mobily provides GSM, 3 and 3.5G voice, data, and multimedia streaming services with speeds of up to 7.2 mbps in the desert kingdom.

“Cost benefit is a default factor in setting up the offshore facility. What we need is competitive and knowledgeable people who are close to technology and Bangalore is the best offshore destination,” Alkaf pointed out.

The GSM World Association recently rated Mobily as the leading mobile operator in the MENA region, with the highest number of 3G subscribers in the markets.

The Etihad consortium is led by the UAE-based Etisalat, with 35 percent equity stake, while six other strategic partners hold 45 percent stake collectively. The balance 20 percent is held by the public after the consortium went through an initial public offering (IPO) recently.

Though Etisalat is keen on entering the booming Indian telecom market, non-availability of spectrum has been cited as a hurdle in applying for a license to the Indian government.

“We are interested in entering India and are monitoring the situation. If the Indian government provides spectrum for overseas firms, we intend to enter the market,” Alkaf noted.

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