The Tata Group has drawn up plans for investing between Rs 10,000 to Rs 14,000 crore in the telecom business over the next five years.

Kishore Chaukar, managing director Tata Industries, told ET, "The group is looking at this investment as an infrastructure investment as going forward the telecom sector will become a major contributor to the GDP of the country. We want to be one of the major player in this sector in the coming years and therefore we are committing this investment to the sector."

The other Indian corporate houses which have made huge commitment to the telecom sector are Reliance and Bharti. Reliance claims it will invest up to Rs 25,000 crore in the business, though the group has not given a break up of this investment.

The Tata group expects to invest in basic, cellular, national long distance, international long distance and internet services. The flagship for the investment will be Tata Teleservices which is currently in talks with Hughes Tele.com for a merger.

Tata Teleservices will be the flagship for Tata group’s investments in telecom. Currently, the company holds the license for Andhra Pradesh and has recenlty bagged the license for four more states including Tamil Nadu, Delhi, Gujarat and Karnataka.

The Tata group also have an interest in the cellular business through Birla-Tata- AT&T. A portion of the proposed investments will also go to the merged entity.

According to Tata Industries’ officials, the group will venture into national long distance and international long distance business through Tata Teleservices. In the case of international long distance however Tata Teleservices will only be involved if the Tata Group fails to acquire state owned long distance operator VSNL.

Most of the investment into Tata Teleservices will be made by Tata Power , Tisco and Tata Sons.

The group is still keen on acquiring VSNL through the disinvestment process even after the new liberal international long distance regulations-- which are perceived to have made VSNL a less attractive proposition by liberalising entry into international long distance-- were approved by the cabinet.

However the legal entity bidding for Videsh Sanchar Nigam Ltd may not be Tata Teleservices due to tax and regulatory reasons.

Teleservices is currently in talks with Hughes Tele.com to form a combined entity consisting of Hughes’ basic telecom business in Maharastra and Tata Teleservices’ Andhra Pradesh circle.

There has been widespread speculation that the remaining four circles in which the Tata Group holds licenses to operate basic services along with the national and international long distance operations will be merged into the combined entity.

However the official stand has been that only the Maharashtra and AP circles were the subject of the negotiations.

Tata Teleservices has been using a combination of WLL, and fiber optic for providing its services in Andhra Pradesh. In Andhra Pradesh, where the company already offers basic telecom services, the Tata group is planning to invest an additional Rs 500 crore during the current financial year.

This additional investment will take the total investment of the company in the state up to a sum of Rs 1,600 crore.