Aug. 27 (Bloomberg) -- Parsvnath Developers Ltd., an Indian builder of homes and malls, will invest about 17 billion rupees ($414 million) to offer mobile-phone and Internet services to benefit from surging demand in Asia's fourth-largest economy.

Applications have been submitted to the government to offer telecommunications services in all 22 zones in the country, Parsvnath said in a release to the Bombay Stock Exchange today. The company intends to invest the money in getting licenses, once it gets the requisite approvals.

``Despite increasing number of subscribers, the penetration of mobile telephony in India is still very low,'' Chairman Pradeep Jain told reporters in New Delhi today. Parsvnath will set up a special purpose vehicle, a company that's being created for the proposed diversification.

With 193 million users, the country has a wireless penetration of less than 18 percent, mainly because of a lack of network coverage in villages, where two-thirds of the 1.1 billion people live. Cities such as New Delhi, the capital and India's largest telecommunications market, have a telephone penetration of almost 91 percent.

India, the world's fastest-growing wireless services market, added a record 8.06 million wireless subscribers in July as carriers such as Bharti Airtel Ltd. and Reliance Communications Ltd. expanded networks, mainly in rural areas.

Jain said Parsvnath was in talks with an overseas wireless services provider to sell a substantial stake in the planned special purpose vehicle. He declined to name the company or the amount of stake Parsvnath intends to sell.

Parsvnath shares gained 14.85 rupees, or 5.3 percent, to 294.6 rupees on the Bombay Stock Exchange.

To contact the reporter on this story: Shailendra Bhatnagar in New Delhi at sbhatnagar3@bloomberg.net.

Last Updated: August 27, 2007 08:52 EDT