France Telecom has received an approval for an internet service license from the Department of Telecom, reports ET. The international player plans to roll out broadband internet in the country through Equant Network Services, its joint venture with Emery Technologies (an investment company by Deepak Puri of Moser Baer). Emery owns 26 per cent in the venture. France Telecom, one of the largest telecom service providers in Europe, is consolidating all its Indian operations under a single license. We wonder if this move is in preparation for the Broadband Wireless Auction…

India has low broadband penetration, with only 5.28 million broadband subscribers as of November 2008, and this number is growing at a rate of 3.06% – 5.09% per month. With the delay in 3G and WiMAX spectrum auctioning, the growth of data services in the country is being further affected. The infusion of new Internet providers could provide the much needed boost to this slumped growth but unless regulatory issues are solved, it will not help reach DoT’s proposed target of 50 million broadband connections by the end of the decade.

France Telecom faces a number of challenges in the Indian scenario, not merely last mile, infrastructure and regulatory issues but low PC adoption and the lack of tailored content for the local masses. With the entry of low cost Netbooks, the adoption of personal computers may rise this year, but there is still a glaring lack of relevant, local services that the telco might find difficult to overcome.

Competition is also tough with established players like Reliance, MTNL, BSNL, Sify and Bharti Airtel battling for corporate and home customers in metros. France Telecom will have to choose a unique strategy to play in this market.