Mid-tier Indian operators Tata Docomo, Aircel and MTS are reportedly in talks to combine their operations – a move which would create India’s third-largest wireless player by subscribers.
However, it may take some time before the talks result into…
Mid-tier Indian operators Tata Docomo, Aircel and MTS are reportedly in talks to combine their operations – a move which would create India’s third-largest wireless player by subscribers.
However, it may take some time before the talks result into an actual transaction because of the complexity in implementing such a merger, according to the Economic Times citing three persons familiar with the matter.
MTS India declined to comment on the report while the other two operators did not reply to requests for comment before the press deadline.
But Vsevolod Rozanov, CFO of MTS India majority owner Sistema, previously described the Indian mobile market as ripe for consolidation, adding he expected foreign investors to take a lead. Eventually, the top seven players could shrink to just four, he was quoted as saying.
Calls for consolidation in India, which is populated with 13 operators, have been made repeatedly from different sides, but regulatory uncertainties, particularly in the aftermath of the 2G scam, have so far delayed potential deals.
However, the recent decision by the government to remove the 74% cap on foreign investments in local telcos and the expected publication of new M&A rules within the next few weeks seem to have bolstered investors’ confidence.
A couple of weeks ago, South East Asia giant SingTel urged India’s largest player Bharti Airtel, in which it has a 33% stake, to consolidate the Indian mobile industry.
Before that, the CEO of Vodafone India, Marten Pieters, described the operator as a “natural consolidator in the market”.
Pieters said Vodafone was financially strong in the country and wanted scale, but that India’s regulatory conditions were not currently suitable for acquisitions.
