US based wireless provider Sprint Nextel is all set top enter the Indian market via a joint venture with Persistent Systems, an outsourced software development firm. The JV company will provide national long distance, international long distance, Internet services and managed network services in India.
Although, the amount being invested in JV has not been disclosed.Sprint, through its international holding company, will have a 74 percent stake in the JV, staying within limits of the permitted FDI limit. Persistent will own the remaining 26 percent equity in the JV. Sprint’s investment in the company is subject to the approval of the Indian Foreign Investment Promotion Board (FIPB) and the company will commence operations after regualtory approvals are received.
Sprint Nextel is the third largest American telecom operator, with 49.9 million customers at the end of 2010, and the first one to start WiMax based 4G wireless services. It runs CDMA and iDen based mobile networks and owns prepaid brands like Virgin Mobile USA, Boost and Assurance. It is also a long distance provider and a global internet carrier comprising a major part of the internet backbone.
Sprint generated free cash flow of $2.5 billion for 2010, consolidated net operating revenues of $32.6 billion, and an operating loss of $595 million, a 57% improvement compared to 2009.
Persistent develops solutions for customers in technology, telecommunication, life science, healthcare, banking, and consumer products sectors across North America, Europe, and Asia. It also has a telecom business unit that focuses mainly on enterprise services like IP communications, OSS/BSS and mobility. It looks like, Persistent is an enabler for Sprint’s entry into the Indian market. Unless the course it is detracted by the hurdles of regulatory framework.