Telenor, Tata Tele in talks to merge India operations

MUMBAI/NEW DELHI Tue Nov 27, 2012 10:43pm IST

The sun rises behind a communications tower in New Delhi March 20, 2006. REUTERS/B Mathur/Files

The sun rises behind a communications tower in New Delhi March 20, 2006.

Credit: Reuters/B Mathur/Files

Related Topics

Stocks

   

MUMBAI/NEW DELHI (Reuters) - Norway's Telenor(TEL.OL) is in talks to merge its Indian operations with Tata Teleservices to gain a bigger foothold in the world's second-biggest mobile phone market, a source with direct knowledge of the situation said on Tuesday.

Telenor, which won rights to operate in six Indian zones in an auction this month after its earlier permits were ordered to be revoked, is looking to take a majority stake in the merged entity, the source said.

The deal will see India's Tata Group cutting its stake in unlisted Tata Teleservices, the country's No. 6 mobile phone carrier, said the source, declining to be named due to the sensitivity of the matter.

The merged entity will be ranked No. 5 by customers.

Japan's NTT DoCoMo (9437.T), which owns a 26 percent stake in the company, will retain its holding in the combined entity, the source said.

Telenor and Tata Teleservices declined comment. NTT DoCoMo could not immediately be reached for comment in Tokyo outside their business hours.

With more than 900 million mobile phone customers, India's mobile phone market is second only to China.

The crowded market, which boasted 15 players until the first half of this year, is ripe for consolidation, analysts have said, as competition and rising debt levels eat into profit margins.

However, there have been few deals, mainly due to regulatory uncertainty and strict government rules on ownership and airwave holdings.

A cabinet decision this month determined that companies buying a carrier that paid a low state-set price for airwaves must match a far higher price determined in a recent auction and pay the difference to the government.

Singapore state investor Temasek owns about 7 percent of Tata Teleservices, while Indian business man C. Sivasankaran holds about 8 percent. It was not immediately clear if their holdings would change if the deal goes through.

Telenor, which earlier operated in 13 Indian telecom zones, will now be reduced to six zones with 34 million customers, while Tata Teleservices has permits for all of India's 22 zones.

(Editing by Jason Neely)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage