The group recently approached the Department of Telecommunications, (DoT) for licences under a newly incorporated company Essar SpaceTel Ltd.

The seven circles it has applied for operating GSM services are Jammu & Kashmir, Assam, the North East, Himachal Pradesh, Bihar, Orissa and Madhya Pradesh.

The development was confirmed by an Essar Group spokesperson. He said, "We expect to receive the letter of intent from DoT very shortly and the group hopes to roll out operations within the, calendar year. The new project will be independent of the "Essar's investments in Hutchison Essar, the joint venture which commands a subscriber base of 72 lakhs and is the third largest cellular company in India with a 19.2% market share."

As part of its focus on the telecom sector, the Essar group has also acquired a 9.4 % stake in BPL Mobile, Hutchison Essar's rival operator in Mumbai. It had acquired the stake from France Telecom. Interestingly Essar has not applied for licences where BPL operates viz. Maharashtra, Tamil Nadu and Kerala, indicating its intention to t have a long-term association with BPL. The licenses, when obtained, would allow Essar to operate in circles in which both Hutch and BPL are absent.

When it commences independent operations in t the seven circles, Essar will be present in all the 23 telecom circles in the country. The ten circles where Hutch is not present now have a total subscriber base of 1.1 crore or 28.89% of the total mobile subscriber base as of end February.These circles, however, have a low teledensity. In the new circles will face competition from the state-owned BSNL, Bharti Cellular and Reliance Telecom Ltd. -Reliance's GSM arm. In the domestic cellular market, Bharti is the leader with a share of 'around 25.5%, while MTNL and BSNL together have a 24.14% share.