The Bahraini mobile operator Batelco plans to re-enter India through an acquisition after losing its licence there in a corruption scandal.
"India is an attractive telecom market due to its size, growth potential and opportunity to launch many innovative services," said Sheikh Mohamed bin Isa Al Khalifa, the chief executive of Batelco.
"Potential opportunities in India remain on our agenda [and] Batelco is interested in investing in existing operators." Last February 2, India's supreme court cancelled 122 of the country's wireless licences, including some mobile licences, in a corruption probe.
The former telecoms minister Andimuthu Raja was jailed for auctioning off the country's mobile licences at below their value in 2008, costing the exchequer about US$30 billion (Dh110.2bn) to $40bn in lost earnings. It has been described as the country's biggest corruption scandal to date.
India's telecoms regulator is now undertaking a fresh round of mobile licence auctions in a bid to re-establish the sector, but some investors, including Batelco, remain wary.
"Slowing growth in the Indian telecoms market and the turmoil caused by the cancellation last year almost certainly means that investors will now take a more cautious view," said Matthew Reed, principal analyst at Informa Telcoms & Media.
So far, none of the Middle East operators have expressed an interest in bidding for a new mobile licence in India.
In one round of auctions held in November for second-generation (2G) licences, the government raised just 94bn rupees (Dh6.3bn) - less than a quarter of what it had hoped for.
"As Batelco is not [interested] in start-up companies, we have no plans to participate in forthcoming auctions to acquire a mobile licence and establish a new start-up telecommunications company," said Mr Al Khalifa.
Batelco sold its 42.7 per cent stake in the mobile operator Stel for about $175 million in February to its Indian partner Sky City Foundation.
It had invested $225m in the Indian operator when it entered the country in 2009. Batelco is currently suing Stel for $185m for failing to adhere to a settlement agreement over their joint venture.
Etisalat was also caught up in the scandal after investing in Swan Telecom, which had acquired one of the licences sold at below-value rates. The UAE operator bought a 45 per cent stake in the start-up for $900m in 2008 and later renamed it Etisalat DB.
It eventually wrote off Dh3.04bn in an impairment charge last year, which resulted in a net effect of Dh1.02bn on its profit.
Etisalat previously said that it had no interest in pursuing a new licence in India in the current round of bidding. But that did not close the door on a venture into the country through an investment in an existing operator.
Mobile subscriptions growth in India slowed from 35 per cent in the year to June 2011 to 10 per cent in the year to last June according to data from Informa.
"Third-generation [3G] services were launched in India in 2011 and there is potential for growth in mobile data, but the take up of 3G services has been fairly modest so far," said Mr Reed.
