Indian company Essar's fully-owned company called Shippingstop.com has signed a national long distance (NLD) license just a day after news of inquiries about Hutch Essar's and six subsidiaries' shareholding patterns broke out.
Essar is one of the first major business groups to apply for NLD and international long distance (ILD) licenses over 10 months ago.
However, it has sought a three-month extension on the letter of intent for the ILD license. Sources say this is because it is still in the process of tying up with various carriers.
Essar's is the tenth license to be awarded after RailTel, Oil India, Powergrid, Sify, Tulip, MTNL and others who queued up for licenses after government slashed entry barriers in long distance telephony.
This promises to stir up competition for NLD's existing four players BSNL, Bharti, Reliance and VSNL and in ILD, for VSNL.
The question in the minds of competitors and analysts is whether Hutch Essar, with its robust 19.4 million mobile subscriber base, will use Essar's NLD license or wait for its own license to come through.
Currently, Hutch uses other NLD operators for carrying NLD and ILD calls.
Sources in Essar admit to being at a loss to predict the final outcome, hoping it will eventually follow commercial and strategic guidance as the market unfolds. While it will be some time before Essar starts providing commercial services, its ILD launch might have to wait longer still.