Telenor and Tata Teleservices are in advanced talks regarding a merger of their Indian mobile operations, but an announcement is unlikely to be made until after the country’s ongoing spectrum auction, it emerged this week.
The firms are currently ironing out the final details of the merger, the Business Standard reported on Wednesday.
Any deal would see Telenor take control of the merged entity with Tata holding a minority stake, it suggested.
The Indian newspaper quoted an unnamed source close to the talks as saying that the telcos will wait until the government has published its M&A policy before making an announcement. That is due to take place once the spectrum auction has concluded.
As of Wednesday evening, after seven days and 43 rounds, the auction had drawn bids totalling around 960 billion rupees (€14.4 billion). The government revealed that bidding is still brisk in the 800 MHz, 900 MHz and 1800 MHz bands, but the 2.1 GHz frequencies are failing to attract much attention.
Both Telenor and Tata Teleservices are taking part in the auction.
Telenor operates in India via its Uninor subsidiary. Uninor operates in six circles and, according to new data published by the Telecom Regulatory Authority of India (TRAI) on Thursday, it had 44.5 million subscribers as of the end of January, amounting to a 4.7% share of the market.
Tata Teleservices is bigger. Its Tata DoCoMo unit has operations in 19 circles, 66.5 million customers and a 7% market share.
However, there have been rumours for some time that the Tatas are looking to exit the telecoms space. At present the firm is in the process of buying back NTT DoCoMo’s 26.5% stake in Tata DoCoMo for 72.5 billion rupees (€950 million), as per the pair’s shareholder agreement.
PriceWaterhouseCoopers (PwC) assessed the value of the stake, putting it at around 23.34 rupees per share, or 60% lower than the INR58 per share laid out in the shareholder pact.
Any deal between Telenor and Tata would take place at the lower valuation, the Business Standard’s source sai d.
