India opens up to MTN, global operators
MTN and a host of international telecoms companies are likely to have welcomed a decision by India’s Telecom Commission to back proposals which would enable foreign operators to take full ownership of local mobile carriers.
Last week, the Indian commissions approved the proposal to raise the cap on foreign direct investment (FDI) in the telecom sector to 100% from a current high of 74%.
International operators had been limited to a 49% holding – rising to a maximum 74% with special regulatory approval from the Foreign Investment Promotion Board (FIPB).
A senior government official told Reuters last week that India’s TC, the highest regulatory body, will send its recommendations to the Department of Industrial Policy and Promotion (DIPP).
The DIPP after consulting other ministries will send a final proposal to be approved by the federal cabinet, the official added.
Africa’s largest telecoms operator MTN Group is believed to be in detailed discussions for a potential acquisition in India with Reliance Communications, the company it tried unsuccessfully to merge with in 2008, according to Bloomberg.
Reliance Communications, which is owned by billionaire Anil Ambani, boasts a customer base of over 130 million, including 7.2 million 3G customers and 29.4 million data customers.
MTN has also previously held talks with Bharti Airtel for a potential R24 billion merger deal in 2009, which was called off.
The SA operator has declined to comment on the matter.
Media reports noted that a senior team from MTN visited India, with subsequent meetings taking place in Dubai. The discussion framework included MTN taking control of Reliance, with Ambani keeping a minority stake in MTN.
Last month (June), MTN missed out on one of the two lucrative telecommunications licences up for grabs in Myanmar.
In April, MTN CEO Sifiso Dabengwa said the group could spend up to $8 billion on an acquisition.
“Growth through M&A is still an important part of our strategy,” he said. “Anything between $4 and $8 billion is something that we could look at.”
Shares in MTN declined R6.13, or 3.34% to R177.51 at close of play on the JSE on Friday (5 July), having reached an all time best figure of R187.79 at the start of July.
Shares in MTN are up R32.91 or 22.76% over the past year, giving the group a market cap exceeding R334 billion.
More on MTN
MTN misses out on Myanmar licence
MTN courting India acquisition: report
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