Tata, Telenor may merge Indian operations

Dylan Bushell-Embling
28 Nov 2012

Indian mobile operator Tata Teleservices is reportedly in talks over merging with Telenor's Indian JV to create the nation's fourth largest mobile operator.

Tata and Telenor's Telewings could combine to become a greater competitive force in the market, three sources toldBloomberg.

The combined company would have around 120 million mobile subscriptions, putting it in fourth place behind Bharti Airtel, Vodafone India and Reliance Communications.

Japan's NTT DoCoMo - which paid around $2.4 billion (€1.85 billion) for a 26% stake in Tata Teleservices in 2009 - would likely remain a shareholder in a combined company, according to the report.

But the sources added that a merger hinges on whether new telecom rules, due to be decided on by Indian cabinet shortly, will require a merged company to return start-up spectrum to the government.

Norway's Telenor dissolved its former Indian JV Uninor and found a new domestic partner following the cancellation of its 2G operating licenses earlier this year.

The company was one of only five to apply to take part in an auction to reallocate parts of the seized spectrum, and was the biggest spender in a bidding process muted by high reserve prices.

Indian industry watchers and even the nation's telecom minister have long urged Indian operators to consider consolidation in response to unsustainable competition in the market.

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