RELIANCE COMM SEES INDIA TELECOM CONSOLIDATION
Intensifying competition in the Indian telecom sector, the world’s fastest growing in mobile sign ups, should kick off an industry consolidation in two years, a senior official at Reliance Communications said.
With four firms, including ventures of Norway’s Telenor and United Arab Emirates’ Etisalat, set to start operations in India this year, existing players led by Reliance and Bharti Airtel have slashed call charges to lure users.
India, which has 11 mobile operators, has this year added an average 14 million mobile users a month. Analysts say still there is huge potential as only 40 people of every 100 own mobile phones from a population of more than a billion.
Reuters/Livemint
Showing posts with label Telenor. Show all posts
Showing posts with label Telenor. Show all posts
Sunday, November 22, 2009
BHARTI SLASHES MOBILE ROAMING CHARGES, SHARES FALL
Bharti Airtel launched yet another new billing plan on Friday, slashing mobile roaming rates by nearly 60% and signalling a tariff war in the world’s fastest-growing wireless market was far from over.
The announcement accelerated losses in the shares of Bharti, the country’s top mobile operator. The stock fell as much as 3.3% but trimmed losses to 2.7% at Rs284.90 by 0825 GMT in a Mumbai market that was up 0.3%.
The price war, aimed at grabbing new users ahead of fresh entrants waiting in the wings, has raised concerns about telecom firms’ profitability. Four new firms, including ventures funded by Telenor and Etisalat, are set to start services this year adding to the existing 11 operators.
Reuters/Livemint
Bharti Airtel launched yet another new billing plan on Friday, slashing mobile roaming rates by nearly 60% and signalling a tariff war in the world’s fastest-growing wireless market was far from over.
The announcement accelerated losses in the shares of Bharti, the country’s top mobile operator. The stock fell as much as 3.3% but trimmed losses to 2.7% at Rs284.90 by 0825 GMT in a Mumbai market that was up 0.3%.
The price war, aimed at grabbing new users ahead of fresh entrants waiting in the wings, has raised concerns about telecom firms’ profitability. Four new firms, including ventures funded by Telenor and Etisalat, are set to start services this year adding to the existing 11 operators.
Reuters/Livemint
Monday, January 26, 2009
INDIAN TELECOMMUNICATION SECTOR: AN ATTRACTIVE INVESTMENT DESTINATION
At a time when the economies globally are witnessing recessionary trends and mobile handset manufacturing companies are cutting their projections of handset sales in 2009, the Indian telecom industry continues to ring aloud with multi-billion dollar deals. Mega investment plans for India are being drafted by overseas telecom service providers, as they seek to participate in the world’s fastest growing mobile telecom market.
Deal Buzz Continues
The Indian telecommunication sector with total deal value of $5.8 billion garnered the maximum share of 19% in the overall merger and acquisitions (M&A) in 2008. The sector started the year 2009 on a high note with the country’s first mega deal announced. Quippo Telecom Infrastructure Ltd., the telecommunication infrastructure arm of India’s largest the infrastructure equipment rental company, Quippo Infrastructure Equipment Limited has announced signing a deal with India’s sixth largest mobile telecom service operator Tata Teleservices Ltd to buy 49% stake in its subsidiary Wireless-TT Info-Services Ltd. (WTTIL) for about $500 million (Rs.24 billion). Quippo Telecom is a part of SREI Group having diversified interests in areas such as infrastructure, capital market services and financial services. Under the arrangement, Quippo and WTTIL will merge their operations comprising about 5,000 and 13,000 telecom towers respectively. Tata Teleservices will have the 51% majority stake in the merged entity.
Earlier, NTT DoCoMo Inc., the largest mobile service operator of Japan, bought 26% stake in Tata Teleservices Limited (TTSL), a part of India’s largest industrial conglomerate Tata Group. The $2.7 billion deal is the largest in the Indian telecom market since early 2007, when Vodafone Group Plc, the U.K. based world’s largest mobile telecommunications network company had acquired 67% stake in Hutchison Essar Ltd (now Vodafone Essar) for $11.1 billion. TTSL stake provides NTT DoCoMo an instant presence across India along with a well-established nationwide mobile network and a subscriber base of more than 30 million. The NTT DoCoMo – TTSL deal, values the company at more than three times of what it commanded three years ago. Temasek Holdings, the investment arm of the government of Singapore, had picked up a 9.9% stake in TTSL at a valuation of about $3 billion in early 2006.
So much is the attraction of this market that even the new entrants, which are yet to role out their network and win their first subscriber, are commanding billion dollar-plus valuations. Telenor ASA, the biggest Nordic telephone company, has signed a deal with India’s second largest real estate company Unitech Ltd to buy 60% of its wireless arm Unitech Wireless (UW) for $1.07b billion (including $400 million debt) on October 29, 2008. UW has the licenses for all 23 telecom circles of India, enabling it to have a nation-wide footprint. UAE-based Emirates Telecommunications Corporation (Etisalat) has acquired a 45% stake in Swan Telecom for $900 million, valuing the company at $2 billion in September 2008. Swan, a part of Mumbai-based real estate and hospitality business house Dynamix Balwas (DB) Group, has secured licenses for 13 circles (two more licenses in process) out of the total 23 circles.
More To Follow:
Telecom has been an active sector in India in terms of M&A deals in the last six-seven years. Yet, we can expect many more equity deals to take place sooner or later. The rush of overseas telecom companies will continue, as they are facing saturated markets at home, while the Indian market has a huge potential for further growth.
The prominent overseas telecom companies that are seeking an entry in to the lucrative Indian market include a number of Middle-East and European service providers such as Qatar Telecom, Kuwait-based Zain Group, Bahrain Telecom, Italy-based Telecom Italia SpA, a leading Turkish telecom company Turkcell etc. South Africa’s MTN Group has also been interested in acquiring, or being acquired by, or merge with an Indian company.
Acquiring a stake in an existing Indian company is the only certain way of entry in the Indian market, and the other option available right now is to participate in the auction for 3G services, which are expected to happen very soon.
The Government of India has set a target of 45% tele-density compared with the current level of 31.50%. The government has estimated that the telecom sector will need $73 billion during the next five years to achieve the target of 45% tele-density, and a major chunk of the required investment is expected to come through Foreign Direct Investment (FDI) inflow, which has gone up to $1261 million in 2007-08 from $478 million in 2006-07.
What Makes Indian Telecom Sector Attractive?
Despite the gloomy outlook owing to the global recession/slowdown in the economy, the telecom sector of India continues to attract record number of new subscribers. The Indian mobile phone operators have been adding about 8-10 million subscribers every month through out this year, and the figure has regularly topped the 10 million mark during the last three-four months. Considering the current pace of fresh additions per month, India has the potential of taking the total tally of subscribers to 700 million in the next five years from the current level of about 350 million, second only to China. About 10.35 million wireless subscribers were added during the month of November 2008, taking the total number to 336.08 million and a similar number was expected during the month of December 2008. The total number of both wireless and wireline subscribers reached at 374.13 million at the end of November 2008, according to the Indian telecom industry regulator, Telecom Regulatory Authority of India (TRAI).
In terms of projected revenues, such a huge subscriber base is expected to generate more than $37 billion by 2012 growing at a CAGR (compounded annual growth rate) of 18%. This growth potential offers enough incentive to overseas telecom companies to vie for their share of the pie. Investor-friendly regulations by the government, allowing up to 74% holding in a domestic entity by a foreign company, is an icing on the cake.
- Potential to achieve 700 million telecom subscribers by 2012 from 374 million currently
- Mobile subscribers at 350 million, second only to China
- High on M&As - NTT DoCoMo acquires 26% stake in Tata Teleservices for $2.7 billion; Telenor buys 60% of Unitech Wireless for $1.07 billion
- Launch of New Platforms : Auction for 3G services soon
At a time when the economies globally are witnessing recessionary trends and mobile handset manufacturing companies are cutting their projections of handset sales in 2009, the Indian telecom industry continues to ring aloud with multi-billion dollar deals. Mega investment plans for India are being drafted by overseas telecom service providers, as they seek to participate in the world’s fastest growing mobile telecom market.
Deal Buzz Continues
The Indian telecommunication sector with total deal value of $5.8 billion garnered the maximum share of 19% in the overall merger and acquisitions (M&A) in 2008. The sector started the year 2009 on a high note with the country’s first mega deal announced. Quippo Telecom Infrastructure Ltd., the telecommunication infrastructure arm of India’s largest the infrastructure equipment rental company, Quippo Infrastructure Equipment Limited has announced signing a deal with India’s sixth largest mobile telecom service operator Tata Teleservices Ltd to buy 49% stake in its subsidiary Wireless-TT Info-Services Ltd. (WTTIL) for about $500 million (Rs.24 billion). Quippo Telecom is a part of SREI Group having diversified interests in areas such as infrastructure, capital market services and financial services. Under the arrangement, Quippo and WTTIL will merge their operations comprising about 5,000 and 13,000 telecom towers respectively. Tata Teleservices will have the 51% majority stake in the merged entity.
Earlier, NTT DoCoMo Inc., the largest mobile service operator of Japan, bought 26% stake in Tata Teleservices Limited (TTSL), a part of India’s largest industrial conglomerate Tata Group. The $2.7 billion deal is the largest in the Indian telecom market since early 2007, when Vodafone Group Plc, the U.K. based world’s largest mobile telecommunications network company had acquired 67% stake in Hutchison Essar Ltd (now Vodafone Essar) for $11.1 billion. TTSL stake provides NTT DoCoMo an instant presence across India along with a well-established nationwide mobile network and a subscriber base of more than 30 million. The NTT DoCoMo – TTSL deal, values the company at more than three times of what it commanded three years ago. Temasek Holdings, the investment arm of the government of Singapore, had picked up a 9.9% stake in TTSL at a valuation of about $3 billion in early 2006.
So much is the attraction of this market that even the new entrants, which are yet to role out their network and win their first subscriber, are commanding billion dollar-plus valuations. Telenor ASA, the biggest Nordic telephone company, has signed a deal with India’s second largest real estate company Unitech Ltd to buy 60% of its wireless arm Unitech Wireless (UW) for $1.07b billion (including $400 million debt) on October 29, 2008. UW has the licenses for all 23 telecom circles of India, enabling it to have a nation-wide footprint. UAE-based Emirates Telecommunications Corporation (Etisalat) has acquired a 45% stake in Swan Telecom for $900 million, valuing the company at $2 billion in September 2008. Swan, a part of Mumbai-based real estate and hospitality business house Dynamix Balwas (DB) Group, has secured licenses for 13 circles (two more licenses in process) out of the total 23 circles.
More To Follow:
Telecom has been an active sector in India in terms of M&A deals in the last six-seven years. Yet, we can expect many more equity deals to take place sooner or later. The rush of overseas telecom companies will continue, as they are facing saturated markets at home, while the Indian market has a huge potential for further growth.
The prominent overseas telecom companies that are seeking an entry in to the lucrative Indian market include a number of Middle-East and European service providers such as Qatar Telecom, Kuwait-based Zain Group, Bahrain Telecom, Italy-based Telecom Italia SpA, a leading Turkish telecom company Turkcell etc. South Africa’s MTN Group has also been interested in acquiring, or being acquired by, or merge with an Indian company.
Acquiring a stake in an existing Indian company is the only certain way of entry in the Indian market, and the other option available right now is to participate in the auction for 3G services, which are expected to happen very soon.
The Government of India has set a target of 45% tele-density compared with the current level of 31.50%. The government has estimated that the telecom sector will need $73 billion during the next five years to achieve the target of 45% tele-density, and a major chunk of the required investment is expected to come through Foreign Direct Investment (FDI) inflow, which has gone up to $1261 million in 2007-08 from $478 million in 2006-07.
What Makes Indian Telecom Sector Attractive?
Despite the gloomy outlook owing to the global recession/slowdown in the economy, the telecom sector of India continues to attract record number of new subscribers. The Indian mobile phone operators have been adding about 8-10 million subscribers every month through out this year, and the figure has regularly topped the 10 million mark during the last three-four months. Considering the current pace of fresh additions per month, India has the potential of taking the total tally of subscribers to 700 million in the next five years from the current level of about 350 million, second only to China. About 10.35 million wireless subscribers were added during the month of November 2008, taking the total number to 336.08 million and a similar number was expected during the month of December 2008. The total number of both wireless and wireline subscribers reached at 374.13 million at the end of November 2008, according to the Indian telecom industry regulator, Telecom Regulatory Authority of India (TRAI).
In terms of projected revenues, such a huge subscriber base is expected to generate more than $37 billion by 2012 growing at a CAGR (compounded annual growth rate) of 18%. This growth potential offers enough incentive to overseas telecom companies to vie for their share of the pie. Investor-friendly regulations by the government, allowing up to 74% holding in a domestic entity by a foreign company, is an icing on the cake.
Thursday, November 13, 2008
INDIAN MOBILE TELECOMMUNICATION: AMPLE SCOPE TO ENTER
--- Potential market of 700 million subscribers and $37 billion revenue base by 2012
--- Tata Teleservices - NTT DoCoMo, Swan Telecom – Etisalat and Unitech Telecom – Telenor deals expose Indian Telecom M&A Potential: Deals at $5.8 billion
--- IT and Telecom most consolidating sectors; only sector to cross three digits mark of 100 deals for $6 billion with 21.4% share in M&As worth $28 billion this year to October;
--- IT and Telecom sectors expected to close the year with deals worth $10 billion
The deal by NTT DoCoMo Inc, Japan’s largest mobile telecommunication service provider to pick up 26% stake in Tata Teleservices Ltd, the telecom services arm of India’s largest private sector diversified Tata Group for $2.7 billion exposes the India entry potential for global mobile telecom service providers who do not have on their radar an India entry strategy yet.
Such service providers are missing out on opportunities in a country where incumbent mobile telecommunication service providers collectively add more than nine million subscribers a month and are projected to have overall mobile services revenues of more than $37 billion by 2012 growing at a CAGR of 18%, according to estimates.
The string of investments in Indian telecom companies, including, Tata Teleservices Ltd, the telecommunication services arm of India’s largest private sector diversified Tata Group by NTT DoCoMo, Inc., the largest Japanese mobile telecom service provider; Unitech Telecom, the telecom arm of India’s second largest real estate developer Unitech Ltd by Norwegian telecom firm Telenor ASA, world’s seventh largest telecom service provider at $1.36 billion; and Swan Telecom, a start-up GSM telecom service company of a Mumbai-based real estate developer Dynamix Balwas Group by Dubai-based Emirates Telecommunications Corp (Etisalat) at $900 million; or, South Africa’s largest telecom company MTN Group’s attempts to enter the Indian market – are an indication of the fact that there is ample room to enter this market, at least inorganically.
“The investments in Tata Teleservices by NTT DoCoMo and the start-up operations of Swan Telecom by Etisalat and Telenor ASA’s in Unitech Telecom exposes the potential for inorganic activity in a market that is otherwise considered to be crowded but has a tele-density of less than 30%, signifying the expected growth potential in the sector.” said Bundeep Singh Rangar, Chairman IndusView Advisors Ltd, the India-focused cross-border advisory firm.
The Tata Teleservices deal will accelerate the telecommunication sector deal activity to $5.8 billion from about $3.1 billion in the deal street that grossed more than $28 billion this year to October.
Opportunities Exist
Other international telecom service providers seeking an
Such growth trends bring with it corresponding increase in investments as government estimates suggest that the overall telecommunication sector will need $73 billion over the next five years to achieve a tele-density of up to 45%. And, a major chunk of the investment is expected to be realized through Foreign Direct Investment (FDI), particularly in the area of mobile communication.
It becomes significant as the government has granted new licenses and spectrum to aspiring operators such as Datacom Solutions a subsidiary of one of India’s leading consumer durables company Videocon Industries Ltd; Loop Telecom, a BPL Mobile Communications group company; S Tel Ltd, joint venture between Skycity Foundations and Telecom Investments (Mauritius) Ltd; among others which are likely targets – but within the regulatory purview of the overseas entity’s stake in the domestic company not to exceed 74%.
“MTN Group, South Africa’s largest mobile service provider with operations in 21 countries is another service provider waiting in the pit-lane to move in to India after its attempts to do so failed on two earlier occasions with leading Indian telecom service providers Bharti Airtel Ltd on the first count, followed by Reliance Communication, which could have been the largest emerging markets telecoms merger worth more than $65 billion.” added RangarOther large mobile telecom deal this year included Idea Cellular Ltd, the telecom business of the diversified Aditya Birla Group, acquiring 40% stake in Spice Communications Ltd, a regional cellular services provider for $675 million.
Information Technology (IT) and Telecom: Deals Despite the Downturn
Taking a collective view of the inorganic growth activity in the technology driven businesses, Information Technology (IT) & IT enabled Services (ITeS) and Telecommunication together account for deals worth about $6 billion emerging as the most consolidating sectors crossing the three digit mark of 100 deals with 21% share in M&As worth $28 billion to October this year.
Some of the large deals in the sector so far include:
§ The acquisition of Citigroup's captive Business Process Outsourcing (BPO) arm Citigroup Global Services (CGSL) for $505 million by
§ WNS Holdings acquisition of Aviva Global services for $228 million,
§ Quatrro BPO Solutions buying a majority stake in the U.K.-based Babel Media for $110 million, and
§ Essar-owned Aegis BPO buying Nasdaq-listed People Support for $250 million
§ ITeS company CBay Systems bought 69.50% stake in MedQuist Inc. for $287 million.
In fact the pending purchase of Axon Group Plc, the U.K.-based provider of SAP implementation consulting, by HCL Technologies Ltd for $814 million after it rivalled the bid of its larger competitor and second largest IT services company Infosys Technologies Ltd, will give the IT and Telecom sector top slot in the sectoral ranking of the merger and acquisition (M&A) table with deal value exceeding $10 billion (including the Tata Teleservices deal).
The other deal in the making is that of Tata Consultancy Services’, India’s largest software services exporter, expected acquisition of Europe's largest engineering conglomerate Siemens AG’s IT Solutions and Services (SIS) unit.
Friday, October 31, 2008
NORWAY'S TELENOR BUYS UNITECH'S TELECOM FIRM
Norway-based Telenor, the world’s seventh largest telecom operator with a subscriber base of about 159 million, has bought new-generation telecom company Unitech Wireless by paying Rs 6,120 crore for a 60 per cent stake. The deal puts the enterprise value of the company, which holds a licence for 22 circles and is yet to roll out its services, at Rs 11,620 crore.
Business Standard
Norway-based Telenor, the world’s seventh largest telecom operator with a subscriber base of about 159 million, has bought new-generation telecom company Unitech Wireless by paying Rs 6,120 crore for a 60 per cent stake. The deal puts the enterprise value of the company, which holds a licence for 22 circles and is yet to roll out its services, at Rs 11,620 crore.
Business Standard
Saturday, October 04, 2008
TELECOM ITALIA BUYS 49% IN UNITECH'S TELECOM ARM
Telecom Italia has piped Norway’s Telenor to acquire 49% stake in Unitech’s telecom arm. A top Unitech executive confirmed that the two firms are close to reaching an agreement whereby Unitech’s telecom business will be transferred to a new company in which Telecom Italia will invest $2 billion for 49% stake. The majority 51% in the joint venture company will be held by Unitech.
The Economic Times
Telecom Italia has piped Norway’s Telenor to acquire 49% stake in Unitech’s telecom arm. A top Unitech executive confirmed that the two firms are close to reaching an agreement whereby Unitech’s telecom business will be transferred to a new company in which Telecom Italia will invest $2 billion for 49% stake. The majority 51% in the joint venture company will be held by Unitech.
The Economic Times
ETISALAT BUYS 45% IN SWAN TELE FOR $900 MLN
Emirates Telecommunications Corporation (Etisalat) has signed a definitive agreement to acquire approximately 45 per cent of Swan Telecom Private Ltd, one of the companies which had recently got the licence for offering mobile services. Etisalat will pay $900 million for the stake, implying an enterprise value of $2 billion. Swan Telecom holds Universal Access Service Licences in 13 telecom service areas in India, and is in the process of acquiring licences in an additional two telecom service areas.
The Hindu BusinessLine
Emirates Telecommunications Corporation (Etisalat) has signed a definitive agreement to acquire approximately 45 per cent of Swan Telecom Private Ltd, one of the companies which had recently got the licence for offering mobile services. Etisalat will pay $900 million for the stake, implying an enterprise value of $2 billion. Swan Telecom holds Universal Access Service Licences in 13 telecom service areas in India, and is in the process of acquiring licences in an additional two telecom service areas.
The Hindu BusinessLine
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