Etisalat doesn't see a deal with Reliance Comm this year

DUBAI Tue Sep 7, 2010 3:02pm IST

A man walks past a logo of Reliance Communication before the Annual General Meeting in Mumbai September 22, 2009. REUTERS/Arko Datta/Files

A man walks past a logo of Reliance Communication before the Annual General Meeting in Mumbai September 22, 2009.

Credit: Reuters/Arko Datta/Files

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DUBAI (Reuters) - Emirates Telecommunication Corp, the Arab world's second-largest telecom operator by market value, does not expect a deal with India's Reliance Communications in 2010, its international chief said on Tuesday.

Jamal al-Jarwan told Reuters the company is considering different options in the Indian market and did not rule out an investment in telecoms firm Idea Cellular, and added that he remains keen on Morocco.

At 0843 GMT, shares in Idea were up 3.3 percent at 74.15 rupees in a Mumbai market that was up 0.3 percent. Reliance Comm shares were down 0.2 percent at 162.65 rupees.

Debt-laden Reliance Communications, controlled by billionaire Anil Ambani, said in early June it was looking to sell a 26 percent stake in the firm.

So far, only Abu Dhabi-based Etisalat has acknowledged that it is considering a deal with Reliance Comm, the only major local cellular carrier without a foreign strategic investor in the world's fastest-growing mobile market.

"I don't see any deal in the near future," Jarwan said. "Definitely not this year. We are taking our time."

Reliance Comm's plan to sell its telecoms tower business to GTL Infrastructure has fallen through, the companies said on Monday, dealing a blow to the efforts of India's No. 2 cellular carrier to nearly halve its debt.

Reliance said in a statement it is in talks with other strategic and financial investors to sell a stake in the telecoms tower business.

"Reliance Comm is still an attractive target. Its only problem is its debt. Otherwise, potential investors are getting a readymade product rather than having to spend money to develop their business in India from scratch," said Deven Choksey, chief executive of K.R. Choksey Shares and Securities.

Potential investors may be seeking more than a 26 percent stake in the company, and that may be why Reliance Comm is yet to find a partner, he said.

ETISALAT'S EXPANSION

Etisalat has been expanding aggressively overseas after losing its monopoly in its home market. It is present in 18 markets globally in Africa, the Middle East and Asia.

Jarwan also said the operator was still "very interested" in the Moroccan market.

"We hope we can move in the right direction with our friends in Morocco. We were very close at one point in time towards signing a deal and we are still waiting," he said, adding that progress had slowed during the summer months.

The operator failed last year in a bid to take a stake in Meditel, Morocco's second-largest telecommunications' firm.

France Telecom is in discussions about taking a stake in Meditel and could be weeks away from signing a deal, its chief executive said on Thursday.

(Additional reporting by Pratish Narayanan in MUMBAI; Editing by Reed Stevenson and Muralikumar Anantharaman)

(For more business news visit Reuters India)

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