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UPDATE 1-India's Tata Tele sells tower unit stake to Quippo
NEW DELHI, Jan 05, 2009 (Reuters via COMTEX) --
India's Tata Teleservices has agreed to sell a
49 percent stake in its telecoms tower arm to another Indian tower firm, valuing
the business at an enterprise value of 130 billion rupees ($2.7 billion).
In a bid to cut costs, Indian mobile operators are increasingly sharing
base stations and tying up with independent operators as they expand across vast
rural districts and penetrate smaller towns, where low income subscribers
dominate.
In November, NTT DoCoMo agreed to buy a 26 percent in the unlisted Tata
Teleservices.
Quippo Telecom Infrastructure Ltd, an unlisted firm in which India's SREI
Infrastructure and the Government of Singapore Investment Corp (GIC) own stakes,
will pay Tata Tele 24 billion rupees and transfer 5,000 towers to the merged
entity.
"This deal assumes a big significance for us ... and coming at a time
when all new operators will need passive infrastructure," Anil Sardana, managing
director of sixth-ranked mobile operator Tata Teleservices, said on Monday.
"3G and broadband wireless access auctions are round the corner. That
will give a lot of opportunity," he said.
The merged tower company, Wireless-TT Info-Services, which will be
managed by Quippo, will have 18,000 towers in total and ramp that up to 50,000
by 2010/11.
India last year gave licences to at least five new telecoms firms, which
are likely to start services in 2009 in an increasingly competitive market where
call rates are already among the world's cheapest.
The government is scheduled to auction spectrum for third-and
fourth-generation wireless services at the end of January.
Tata Teleservices had 31 million subscribers at the end of November on
the less popular CDMA platform.
Rivals Bharti Airtel, Vodafone Essar and Idea Cellular have formed a
joint venture tower firm, which now owns about 80,000 towers, India's largest
such company.
Shares in Tata Tele's listed unit, Tata Teleservices (Maharashtra) closed
2.7 percent up on Monday, while SREI shares jumped about 20 percent in a Mumbai
market that gained 3.2 percent.
Citigroup and Nomura advised Tata Teleservices, while Quippo was advised
by JM Financial.
GSM SPENDING
Tata Tele is looking to spend $2 billion to enter the dominant GSM
sector, and Sardana said it would announce the launch of GSM services shortly.
The company has received GSM radio spectrum in 13 of India's 22 telecom
service areas and hopes to get airwaves in most of the remaining areas by the
end of this month, he said.
As part of NTT DoCoMo deal, the Japanese firm and Tata Sons, the parent
of Tata Tele, will make an open offer for up to 20 percent of listed unit Tata
Teleservices (Maharashtra).
The offer was slated to open on Jan. 8, but has been delayed as India's
stock regulator is yet to give its approval.
Tata Group firms own about 80 percent of Tata Teleservices. Temasek has
about 9 percent and investor C. Sivasankaran holds 8 percent. Sardana said they
would "stay put".
($1=48.6 rupees)
(Editing by Mark Williams) Keywords: TATATELE/
(devidutta.tripathy@thomsonreuters.com; +91 11 4178 1009; Reuters Messaging:
devidutta.tripathy.reuters.com@reuters.net)
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