Bharti’s Chairman Grows More Confident of MTN Deal

From http://online.wsj.com/article/SB125084972837849039.html?mod=rss_india_news on August 24, 2009

By COSTAS PARIS

Bharti Airtel Ltd. Chairman and Managing Director Sunil Mittal said the second extension to talks with MTN Group Ltd. of South Africa signals that a deal may be worked out this time around.

“It gives us more confidence, but you never know with these things until the last moment,” Mr. Mittal said in an interview Friday.

Mr. Mittal’s comments came after Bharti and MTN extended their talks until Sept. 30 without giving a reason.

MTN and Bharti, India’s largest mobile-phone operator by subscribers, in May revived talks to create a telecommunications company with annual revenue of at least $20 billion and 200 million subscribers.

People familiar with the situation said Friday that Bharti and MTN have extended their talks to settle differences on pricing and the makeup of the combined entity’s board. The two companies have described their prospective deal as a $23 billion merger.

Mr. Mittal said he wasn’t in a position to confirm or deny whether Bharti would sweeten its offer.

A second person said MTN’s management and some shareholders are asking for an additional $1 billion from Bharti to complete the deal.

The person said there will be more clarity when MTN releases its half-year earnings on Thursday.

The basic terms announced in May would see Bharti accumulate a 49% stake in MTN, buying a stake directly for cash and newly issued global depository receipts, plus receiving MTN shares as part of the swap.

MTN would buy a 25% stake in Bharti for $2.9 billion in cash plus new shares, while stock received by its shareholders would take its stake in Bharti to about 36%.

Bharti, MTN Executives Meet with Indian Finance Minister

http://online.wsj.com/article/SB125110691436753327.html?mod=rss_india_news on August 24, 2009

By MUKESH JAGOTA and R. JAI KRISHNA

NEW DELHI — Bharti Airtel Ltd. Chairman Sunil Mittal and MTN Group Ltd. Chief Executive Phuthuma Nhleko met Monday with India’s federal Finance Minister Pranab Mukherjee as the two companies strive to come closer to a deal to combine.

The meeting comes as Bharti, India’s biggest wireless operator by subscribers, and South Africa’s MTN last week extended their merger talks for the second time to Sept. 30.

The agenda of the meeting with the finance minister wasn’t disclosed, and Messrs. Mittal and Nhleko declined to comment when approached by Dow Jones Newswires after the meeting.

Finance ministry officials also declined to comment on the minister’s talks with Bharti and MTN executives.

Bharti and MTN have been in talks for more than two months on a complex cash and share swap, which they say would be a $23 billion merger.

On Friday, Mr. Mittal told Dow Jones Newswires the second extension to talks with MTN signals that a deal may be worked out this time around. But people familiar with the matter said there are still differences on pricing and the makeup of the combined entity’s board.

Some analysts speculate that the companies’ meeting with the finance minister could be related to foreign ownership laws for telecom firms in India. A foreign company isn’t allowed to own more than 74% in local telecommunications operators.

The basic terms announced in May would see Bharti accumulate a 49% stake in MTN, buying a stake directly for cash and newly issued global depositary receipts, plus receiving MTN shares as part of a swap. MTN would buy a 25% stake in Bharti for $2.9 billion in cash plus new shares, while stock received by its shareholders would take its stake in Bharti to about 36%.

Bharti is 30%-owned by Singapore Telecommunications Ltd.

Tata Tele in talks with PC makers

Adith Charlie

On August 22, 2009 on the Hindu Business Line at http://www.thehindubusinessline.com/2009/08/22/stories/2009082250720400.htm

Mumbai, Aug. 21 Tata Teleservices looks to partner with laptop and netbook makers for promoting its mobile broadband service, Photon, among buyers of new computers.

The Mumbai-based firm is currently in talks with companies such as Lenovo, HCL, Dell, Toshiba and others for the same.

“We are looking to sign up with laptop manufactures to see whether they can incorporate the Tata Photon as a purchase device along with their laptops and also give special offers on the same. The days of people buying a laptop without going in for connectivity options have clearly gone,” Mr Lloyd Mathias, President- Business Development, VAS & Chief Marketing Officer told Business Line.

Tata Tele already has a tie-up with Hewlett-Packard; consumers can get a Rs 3,500 Photon Plus for Rs 1,200 when they buy a HP/Compaq laptop.

The company is expected to sign up with at least two more laptop manufacturers in the next few months.

Wireless Tata Telecom Has Bid for Aircel’s Tower Operations

At http://online.wsj.com/article/SB125084655798248997.html?mod=rss_india_news on August 21, 2009

By DEEPALI GUPTA

MUMBAI — India’s Wireless Tata Telecom Infrastructure Ltd., or WTTL, has made an initial bid for the telecom towers of mobile-phone operator Aircel Ltd., a director of the company that controls WTTL said Friday.

“We are currently studying Aircel assets after making an initial bid,” Quippo Telecom Infrastructure Ltd. Director Sunil Kanoria told Dow Jones Newswires.

WTTL is the second company after GTL Infrastructure Ltd. to confirm an interest in the tower operations of unlisted Aircel, in which Malaysia’s Maxis Communications BHD holds 74%.

Demand for passive network infrastructure such as towers has boomed in India – the world’s fastest-growing telecom market – as new mobile providers opt for leasing the infrastructure to reduce costs and roll out services faster.

Besides independent infrastructure providers such as GTL and WTTL, the other main providers of telecom towers in the country include Indus Towers Ltd. and Reliance Infratel Ltd.

Mr. Kanoria declined to give an estimate on the size or value of the stake WTTL plans to buy. GTL also hasn’t yet announced the details of its bid.

Local media reports have said Aircel was planning to sell a 51% stake in its tower business. Analysts estimate Aircel’s about 12,000 towers are valued at around 5 million rupees-6 million rupees ($102,312-$123,000) each.

Aircel officials weren’t available for comment.

WTTL is the result of a merger of the telecom tower operations of Tata group’s Tata Teleservices Ltd. and Quippo in January. While Tata Teleservices holds 51% of WTTL, its remaining stake and management control is with Quippo.

The company now has about 25,000 towers. At the time of the deal in January, the combined entity had about 18,000 towers, which gave it an enterprise value of 130 billion rupees.

WTTL has a target of having 60,000 towers in two years, excluding any addition from a potential acquisition of Aircel’s tower operations, Mr. Kanoria said.

It plans to spend 50 billion rupees to 55 billion rupees on building towers over the next two years, he said.

The expansion program is well funded for around six months, Mr. Kanoria said. For subsequent expenditure, the company plans to raise funds through debt and may also consider the equity route, he said.

Funds may be raised from existing shareholders or from an institution, Mr. Kanoria said. Eventually the company would look at a public listing, he added, without elaborating.

Global players find MTNL’s WiMax project terms unattractive

Disincentives

Operator will have to partner a company that has no expertise in the area

MTNL asking for too much of revenue share and branding

——————————————————————————————————————————————

Thomas K. Thomas on August 15, 2009 in The Hindu Business Line at http://www.thehindubusinessline.com/2009/08/15/stories/2009081551020400.htm

 New Delhi, Aug. 14 International WiMax operators eyeing MTNL’s franchisee contract are unhappy with the conditions specified by the state-owned company in the tender document.

Some of the operators have told MTNL that the terms were restrictive as they permit only system integrators (SIs) or original equipment manufacturers (OEMs) to bid.

“We met senior MTNL officials and have told them the disadvantages of allowing only SIs and OEMs to bid. This will mean that an international operator, who has all the experience to take forward MTNL’s WiMax services, will have to necessarily partner with a company that has no idea of rolling out broadband services,” said a foreign operator looking to bid for the WiMax project.

Another operator said that while an SI did not have any idea of rolling out a WiMax network, OEMs would not like to partner with MTNL and become competition to the private players, who could be their clients. “An equipment vendor can never become an operator. It will lead to a clash of interest with its other customers,” said the operator.

Foreign players have also pointed out that MTNL was asking for too much in terms of revenue share and branding conditions whereby it has been made mandatory to use the PSU’s name to sell service.

“Why would a foreign player invest in setting up a network if it has to offer services in MTNL’s brand and also offer a large part of the revenue to the PSU?” asked a foreign player. However, MTNL officials said several system integrators and original equipment manufacturers have expressed interest.

“We are not forcing anyone to bid. These are the terms and conditions that we have put out for the benefit of MTNL. We are not responsible for another operator’s business case. Having said that, there are a number of OEMs in the WiMax space who are adopting new business models whereby they set up the network and also manage it. There are foreign players we know who are talking to such OEMs to jointly bid for this project. We hope to get a good response,” said an MTNL official.

A number of players, including SOMA, Yota, UQ Communications and Spice Group, may bid for the MTNL project, which envisages wireless broadband services in Delhi and Mumbai. But foreign companies such as Yota and UQ will have to partner a system integrators or an original equipment manufacturer if they want to bid.

SOMA is on a stronger wicket because it is both an operator and an original equipment manufacturer.

MTNL will enter into a revenue sharing agreement with successful bidders.

US company gets BSNL WiMax deal

The Hindu Business Line of August 14, 2009 at http://www.thehindubusinessline.com/2009/08/15/stories/2009081551000401.htm

Bharat Sanchar Nigam Ltd has awarded a contract to US-based equipment manufacturer Harris Stratex for supplying WiMax base stations in Kerala. BSNL said the contract was not based on a franchisee model but on outright purchase of equipment. This is part of BSNL’s urban WiMax project to roll out wireless broadband services. The contract was bagged by Telsima, which was recently acquired by Harris Stratex. The US-based firm has partnered Indian turnkey solutions provider ICOMM for implementing the project. The PSU had earlier given a similar contract to Huawei for supplying gear in Punjab. – Our Bureau

RComm in exclusive talks with Alcatel-Lucent for Rs 2,500 cr outsourcing deal- Telecom-News By Industry-News-The Economic Times

17 Jun 2009, 1128 hrs IST, ET Bureau & Agencies

Print EMail Discuss Share Save Comment Text:

NEW DELHI: Reliance Communications (RCom) is in exclusive talks with French telecom infrastructure provider Alactel-Lucent to award a $500million (Rs 2,500 crore) operations and maintenance contract.

Last year, Reliance and Alcatel formed a joint venture for network management services, with the Indian company holding 33 percent and the French company owning the rest.

Last week, Reliance Communications entered into a marketing JV with Krishak Bharati Cooperative Limited (KRIBHCO) for selling its products in rural India.

The JV company known as KRIBHCO Reliance Kisan Ltd is aimed at synergising the strengths of both companies to create a rural distribution model for sales of telecom and non-telecom products.

KRIBCO will hold 60% equity in the JV company with the balance 40% held by Reliance ADAG.

RCOM’s tie-up aims to be a counter to that of Bharti Airtel, which has a similar JV with Indian Farmers Fertiliser Cooperative (IFFCO), the country’s largest fertiliser PSU unit.

In May, Bharti and IFFO had formed IFFCO Kisan Sanchar Ltd (IKSL) and said that the JV would harness the power of telecom to add value to the farm sector. Here IFFCO has a 50% stake while Airtel and Star Global have 25% each.

via RComm in exclusive talks with Alcatel-Lucent for Rs 2,500 cr outsourcing deal- Telecom-News By Industry-News-The Economic Times.

Related stories at

• http://economictimes.indiatimes.com/Reliance-Communications-in-talks-with-Alcatel-Lucent-for-a-500-mn-outsourcing-deal/articleshow/4667231.cms

Unitech unit to launch mobile svcs in Dec qtr- Telecom-News By Industry-News-The Economic Times

Unitech unit to launch mobile svcs in Dec qtr

via Unitech unit to launch mobile svcs in Dec qtr- Telecom-News By Industry-News-The Economic Times on June 16, 2009

NEW DELHI: The telecoms unit of Indian developer Unitech Ltd will launch mobile services with Norway’s Telenor in the December quarter this year, Unitech Ltd’s managing director said on Tuesday.

Unitech Wireless, in which Telenor is taking a 67 percent stake, has got wireless spectrum in 21 service areas, excluding Delhi, in the world’s fastest growing wireless market, Sanjay Chandra told reporters.

Datacom row ends as Nahata agrees to sell stake to Dhoots

15 Jun 2009, 0040 hrs IST, Chaitali Chakravarty & Joji Thomas Philip, ET Bureau

NEW DELHI: Mahendra Nahata of Himachal Futuristic Communications (HFCL) has finally agreed to sell his 36% stake in telecom service provider Datacom Solutions to the Dhoots of the Videocon Group to end a year-long corporate battle that had spilt over to lenders, regulators and even potential foreign investors, two people familiar with the negotiations said.

The Dhoot family, which owns a 64% in Datacom, is already negotiating with a European company to pick up a strategic stake in the company to bankroll its pan-India rollout plans, a person familiar with the settlement said on condition of anonymity.

While Mr Nahata’s 36% stake is valued at around $300 million (about Rs 1,422 crore), the HFCL chairman will not get this payment immediately, top executives said. As of now, the Dhoots had paid Mr Nahata a ‘token payment’ and the remaining would be paid in tranches, they added.

Datacom, which had got licences to offer telecom services in all circles in India except Punjab early last year, has yet to start operations mostly due to the standoff between its two partners.

Both Mr Nahata and Mr Dhoot denied that any such deal has taken place.

Mr Nahata said that talks of any settlement between the two partners of Datacom were baseless, adding that he would continue to remain a stakeholder in the telco. Similarly, Videocon group chairman VN Dhoot, in reply to an email query, said: “There is no question of shareholding changes or settlements or payouts between the two parties.”

A person familiar with the deal said that it is likely to involve a merger of HFCL Infotel’s telecom operations in Punjab with Datacom.

But Mr Nahata will not get any additional cash consideration for HFCL Infotel, as its debt of more than Rs 400 crore will be transferred to the books of Datacom.

Mr Dhoot denied this too. “It is denied that any deal involving HFCL Infotel’s telecom operations in Punjab being merged with Datacom has taken place with Mr Mahendra Nahata,” he said.

He said Datacom has engaged Morgan Stanley to find a strategic partner, but refused to name any likely foreign partner due to the non-disclosure clause with Morgan Stanley.

The negotiations between Mr Nahata and the Dhoots had been deadlocked for close to 15 months with Mr Nahata demanding Rs 2,116 crore for his stake.

Last year, he had rejected an offer by the Dhoots to buy him out for Rs 1,360 crore. The valuations of telecom companies, which got licences last year, have crashed over the past nine months.

Datacom, which commanded a valuation of nearly $3 billion in early 2008, is now valued by analysts at around $1 billion. It had announced that it would begin operations in Chennai by August 2008, but the deadline was postponed to December 2008.

The company failed to meet this too. The standoff between the partners had also resulted in several potential international investors refusing to buy into the company.

UAE’s Etisalat held several rounds of talks with Datacom, but eventually picked up 45% stake in another new telco Swan for $900 million.

Some foreign telcos had even set a pre-condition that they would only invest in Datacom after both the warring stakeholders exit the firm.

The foreign telcos then wanted to bring in their own Indian partner to hold 26% in the telco. Indian regulations allow 74% foreign direct investment in the telecom sector.

Will TN be Tata DoCoMo’s first port of call?

The Hindu Business Line on June 13, 2009

Our Bureau

 Chennai, June 12 Although Mr Deepak Gulati, President, Tata DoCoMo, refused to commit on when the new GSM mobile operator would begin its calling, he let slip a telling comment as he closed a meeting with a group of journalists here: “See you before the end of this month.”

There was nothing notably unique in Mr Gulati’s description of relative strengths of Tata Docomo vis-À-vis the competition: Strong parents, winning technology, value-based pricing, unexceptionable customer service — singularly common industry language. When this was pointed out, Mr Gulati said, “Wait and see.”

Tata Docomo has GSM licence for offering cellular phone service in 18 of the 22 telecom circles in India. Of the other four, the only significantly large circle that the Tata-NTT DoCoMo joint venture does not have is Delhi. (DoCoMo has a 26 per cent stake in the company, which it acquired in November 2008 for $2.7 billion.)

Mr Gulati said that DoCoMo is the largest operator in Japan with 52 per cent market share, a pioneer of the 3G technology in Japan, and an intensely technology-based company. Backed with such technical strengths and Tata’s brand image, Tata DoCoMo expects to garner a significant share of the growing Indian mobile market. Mr Gulati did not want to disclose the company’s subscriber or revenue projections.

150 start-ups dial Bharti innovation fund

Thomas K Thomas on The Hindu Business Line on June 12, 2009

New Delhi, June 11 As many as 150 start-ups have sought seed capital from the Rs 200-crore Bharti Airtel Innovation Fund. The telecom major will shortlist entities with interesting ideas and probably pick up equity stake in these ventures.

Bharti Airtel told Business Line that the ideas received by the company include applications for mobile TV, M-commerce, wireless security, m-advertising, healthcare and social networking.

The fund was started by Bharti in September 2008 to encourage developers to come up with innovative applications for mobile users.

In response to an e-mail questionnaire, Mr Sarvjit Singh Dhillon, Group Director, Bharti Enterprises, said, “Yes, we will be open to picking up equity stakes in these companies with the primary objective of playing the role of a mentor to these potential start-ups while promoting innovation and entrepreneurship.

“We have received an encouraging response to the Airtel innovation Fund which is aimed at promoting innovation and entrepreneurship in the field of telecommunications. Till now, we have received over 150 applications from the potential start-ups.”

Evaluation on

While the company did not give the specifics of the applications, Mr Dhillon said the process to choose right candidates is on.

“We are happy with the response received by the fund as it meets our primary objective of promoting innovation and entrepreneurship in the telecom sector. However, we are still evaluating the suitability of individual submissions from an innovation and economic perspective. While we have short-listed several candidates for consideration, there is still further review/assessment and discussions to be undertaken.”

Analysts said this move could be important in the light of third generation mobile services scheduled to be launched early next year.

Mobile operators such Airtel will require a host of innovative applications if they have to make money by offering 3G services.

At present, the mobile market is driven by revenues from voice-based services. However, with the tariffs spiralling downwards, operators are on the lookout for the killer application.

Through this fund, Bharti may be hoping to have a nursery of ideas for driving up its revenues through value-added services.

Bharti’s approach is similar to the one being followed by IT major Intel, which is funding application development for WiMAX technology.

PwC, E&Y among 8 shortlisted consultants by BSNL

11 Jun 2009, 1931 hrs IST, PTI on www.economictimes.com

NEW DELHI: State-run BSNL has shortlisted eight consultants, including Ernst & Young, McKinsey, KPMG and PriceWaterHouseCoopers, for its plans of mergers and acquisition, strategic partnerships and overseas forays.

A BSNL official told PTI it has also empaneled British Tele Consults, Value Partners, PRPM Consults and Diamond Management and Technology Consultants.

The official said PwC has furnished a certificate to BSNL saying it has not been barred to deal with any PSU and BSNL, if found later so, it can terminate the services of PwC.

These consultants will have to enter into an agreement with BSNL by tomorrow. Each time BSNL undertakes an overseas initiative, these eight firms will be asked to quote their commission price and the the lowest bider will be selected for that particular job, the official said.

The official said the PSU is looking at Africa as an area of focus as it is an emerging region and also culturally, financially, African countries suits more to India firms.

The state-run firm, which so far concentrated only on the Indian market (except Delhi and Mumbai), has decided to expand overseas. Sources said BSNL has a cash surplus of over 10 billion dollars and would use part of these resources for its overseas foray.

Tata Comm, Qtel Announce Strategic Alliance

Wednesday, June 10, 2009:  Tata Communications and Qtel have entered into a strategic alliance that will strengthen both companies’ network reach in the region and internationally. Under the terms of the agreement, both the companies will align their infrastructures and work together to provide secure, scalable and flexible connectivity solutions including Ethernet, MPLS (Multi Protocol Label Switching) and a wide variety of managed services to their global customers.

Eng. Khalid Al Mansouri, executive director, business solutions, Qtel, said, “This is a landmark agreement which will help to position Qtel at the heart of one of the most robust communication networks in the world today.”

“Joining hands with Qtel is a winning proposition for Tata Communications as it lends an invaluable perspective to our mission of delivering seamless connectivity and flagship communications services to customers with diverse and widespread network needs,” added Vinod Kumar, President and chief operating officer, Tata Communications.

Over time, the agreement will enable Tata Communications to deliver Layer 2 Ethernet over SDH, Ethernet over MPLS and a range of configurations including Dedicated Multipoint Ethernet services to its international network of customers through Qtel.

In return, Qtel customers will have access to a range of new MEF (Metro Ethernet Forum) certified services, delivered via Tata Communications’ major networks of submarine cables and its Tier-1 IP network that spans across five continents.

Related story at

• http://indiatelecomnews.com/?p=236
• http://economictimes.indiatimes.com/Tata-Communications-signs-pact-with-Qatars-Qtel-Text/articleshow/4632852.cms

France Telecom & Telstra in talks with Maxis to buy minority stake in Aircel

10 Jun 2009, 0047 hrs IST, Rashmi Pratap & Boby Kurian, ET Bureau

MUMBAI | BANGALORE: France Telecom and Telstra of Australia are in talks with Malaysia’s Maxis Communication to buy a minority stake in Indian telecom operator Aircel, in yet another sign that the ongoing slowdown and credit crunch are having a negligible impact on deal activity in the telecom sector.

The talks between the two overseas players and Maxis revolve around France Tele buying a 20-25% stake in Aircel, a dominant player in Chennai and Tamil Nadu. Aircel, which is one of the major regional players in India, is in the midst of a $5-billion expansion plan that will see it becoming a pan-India player.

Meanwhile, Saudi Telecom, which owns 25% in Aircel parent Maxis, is likely to increase its stake in the company to 35% for about $1 billion. The money from the sale of Maxis’ stake will also be used to invest in Aircel. Goldman Sachs is advising Saudi Telecom in its transaction with Maxis. The deal with Saudi Telecom is expected to be completed within a month.

Estimates of the valuation of Aircel, which has a subscriber base of 19.6 million, vary between $7 billion and $8 billion. France Tele, which is not looking to buy a majority stake, will end up paying about $1.4-2 billion if the deal goes through at this valuation, people close to the development said.

The Indian telecom sector is perhaps one of the few sectors in the economy that is still witnessing strong M&A deal activity despite an economic slowdown. In the past 10 months, about $5 billion of deals have been concluded, including a mega $2.7-billion transaction that saw Japanese giant NTT DoCoMo buying 26% in Tata Teleservices.

Indian telecom companies, too, are growing at a scorching pace with monthly subscriber additions rising to more than 10 million a month. At this rate, Indian subscriber base is expected to leap past the 500 million mark in double quick time.

Aircel on course to widen pan-India reach by June 2010

The continued high growth is of great interest to foreign investors. Impending developments such as auction of spectrum for 3G (third generation) and broadband wireless access (BWA), besides the entry of MVNOs (mobile virtual network operators), offer further growth opportunities,” said Salil Pitale, head (telecom & media), at Enam Investment Banking.

For France Telecom, Europe’s third-largest phone company which owns the Orange brand, it will be an opportunity to re-enter the world’s fastest growing telecom as it faces a slowdown in its home turf and in other mature markets.

In response to an e-mail, an Aircel spokesperson said, “We are not aware of any discussions with France Telecom about this matter. Maxis Communications and its partners remain firmly committed to the accelerated growth and development of Aircel to be a successful pan-India operator.” A France Telecom spokesperson said, “We do not comment on market rumours.”

France Telecom first approached Maxis in August last year, just before the global market meltdown. “At that time, it was also in talks with Tata Teleservices (TTSL). Negotiations with Maxis were revived after NTT DoCoMo clinched the deal with TTSL,” a person familiar with the discussions told ET.

Maxis was also in talks with AT&T last year for selling a similar stake, but the deal could not go through because of differences in valuation. Talks between France Tele are still at a preliminary stage and the deal may also fall through because of Maxis’ insistence that the prospective investor also purchase a small stake from Maxis. France Tele, on the other hand, wants the investment to go into the company, that is Aircel, and is not keen on buying directly from Maxis.

Maxis owns 74% in Aircel while the rest is held by Chennai-based Reddy family, promoters of Apollo Hospitals. France Tele had held a stake in Mumbai-based BPL Mobile for many years before exiting in 2003. In 2007, its group company Orange Business Services acquired GTL’s enterprise and managed services division. Subsequently, it bagged NLD and ILD licences in India. A stake in a mobile firm now will complete France Telecom’s India story.

Aircel is currently in a money-guzzling mode, with the target to complete pan-India footprint by June next year. Ananda Krishnan, the owner of Maxis, also needs money to pump into Natrindo Telepon Seluler, a telecom firm in Indonesia which has a 3G licence. Plus, he bought out NTT DoCoMo from Sri Lanka Telecom in 2007 and that business also requires continued investments.

In a bid to fund these plans, Ananda delisted Maxis in June 2007 in a $12-billion deal and within days, he sold 25% of it to Saudi Telecom for over $3 billion. Due to this, Saudi Telecom has an effective 18.5% stake in Aircel. Dilution of another 25% in Aircel will help Ananda’s Maxis raise around $2 billion at a time when global credit scenario is not very positive.

At the same time, India’s telecom growth story continues to attract international investor interest, with all the major telcos making a beeline for India. This is despite the presence of 12 players and entry of four more telcos later this year. For Ananda, stake sale could be an opportunity to raise money without giving any controlling rights.

Low-profile billionaire Ananda Krishnan, whose business empire stretches from telecom and media to power and construction, is known for buying and selling businesses. In May last year, he sold Excel, the giant exhibition venue in London’s Docklands, for around $230 million, to a group backed by the crown prince of Abu Dhabi. He then bought a 20% stake in British regional newspaper chain Johnston Press and is widely believed to be interested in setting up a global media empire.

“Our business is a bit broader than just providing network or pipes”, says Sunil Joshi

From India Telecom News on June 10, 2009

Sunil Joshi, President, Tata Communications Enterprise Business, Emerging Markets says: “Our business is not a single line of business. We have multiple lines of business to de-risk ourselves in how we engage. We have a voice business which, by virtue of that, we are the world’s largest wholesaler of voice. “

“And about 24 billion minutes of voice run on our backbone. Now what that gives us is steady cash flow to run and operate our business and invest in other areas of growth. Our global data and mobility services business is the next largest business, which is a growth business for us. That has grown 29% year-on-year. ”

The voice business grew 12% year-on-year. This is the last 12 months, the fiscal year ending 31st of March, 2009. Our EBITDA in the last year has grown 53% year-on-year.

So there are two things. You are right about the cost pressures because the deregulation drives prices down. And our legacy organisation was such that they enjoyed the benefit of a really regulated market. But in a competitive world, it does have impact to the prices, which does end up going to the consumer or the business that leverages that service. Then it’s for us to optimise our infrastructure, whether, it’s our IT, our engineering, our procurement. And we’re spending a lot of time in making sure that our costs are managed, while the price points are also seeing pressure to come down in the marketplace. This is within India, specifically.

We also have some growth engines, what we call start-ups, if you like. So our investment in NeoTel in South Africa, we have increased our stake last year from 26% to 56% in NeoTel. NeoTel is the second largest telecommunications company in South Africa. And that’s part of our emerging market strategy. A lot of our enterprise customers are looking at the African continent to now look at also growth, while they’re looking at Asia and some of the other economies.

So to back that up, we are also investing in what we call the [Seacon] cable. Seacon cable is expected to come up in the next month or so. And that will enable connectivity from Mumbai, right across the east coast of Africa, to South Africa. We’ve also announced an investment in [WACS], which is the West Africa Cable System. And that will take the connectivity of South Africa on the west coast of Africa into Europe, thereby connecting what is the other new emerging geography. And you’ll find that that enables us to connect enterprises and carrier customers and continue to drive our revenue [through].

The few other small organisations, like the broadband unit that we have, [TCISL], which is predominantly focused on retail broadband and the growth. And we have about 315,000 subscribers on the retail broadband [shop] and growing. We have investments in other small organisations, an in-house subsidiary called [TCTSL]. It’s Transformation Services Limited. So what that does is, it supports telecommunications organisations and outsources that with the [BSS] infrastructure.

So our business is a bit broader than just providing network or pipes. And with that infrastructure providing value-added services and managed services, it allows us to continue to move up the value chain for our customers. Sorry about the long answer to that.

Huawei may bid for majority stake in ITI

Thomas K Thomas on The Hindu Business Line

New Delhi, June 8 Chinese telecom vendor Huawei may be one of the interested bidders for picking up stake in the factories owned by State-run Indian Telephone Industries Ltd. Huawei told Business Line that it was open to discussing opportunities for strengthening relationship with the Indian manufacturing company for whom the Department of Telecom will invite bids from strategic partners.

When contacted, a Huawei India spokesperson did not rule out the possibility of acquiring ITI. “Huawei India already has a strong and successful tie-up with ITI for transmission network for the Indian market, and is open to further discussion for more collaboration with business partners and governments in developing the local telecom industry, including local manufacturing in India. The specific plan is yet to be finalised by our parent company,” the spokesperson said.

Alcatel Lucent could be the other interested party, but the company is yet to confirm their plans.

Both Huawei and Alcatel Lucent has had a strategic partnership in the past for supplying mobile equipment to BSNL. Both these companies are also strong in the WiMax and IP-based telecom equipment market for which ITI’s existing factories can be used. However, if Huawei does bid for a stake in ITI’s factories it may have to deal with the security concerns raised against Chinese vendors by the Intelligence Bureau.

3 SPVs planned

 The Government is proposing to set up three special purpose vehicle companies for divesting stake in three of the six manufacturing plants owned by ITI. The three plants are located in Rae Bareli, Nainital and Bangalore and is involved in producing WiMax modems and optical transmission equipment. DoT plans to invite private players to pick up majority stake in the range of 51 per cent to 74 per cent in each of the three SPVs.

To start off the process, DoT on Monday invited expression of interest from global consultants to act as advisors to the Government. The consultant will be finalised by end of June.

Related stories at

• http://www.thehindubusinessline.com/2009/06/09/stories/2009060951130400.htm

RCom, Alcatel to enter into Rs 3,000cr deal

From www.ciol.com on June 9, 2009

MUMBAI, INDIA: In what could be one of the largest outsourcing deals in the Indian telecom space, Reliance Communications is close to awarding a $500-600 million (Rs 2,500-3,000 crore) operations and maintenance contract to French telecom infrastructure provider Alactel-Lucent, says a report in Business Standard. The contract would be either executed independently by Alcatel-Lucent or by the joint venture between Alcatel-Lucent and RCom formed in May 2008 for managed network services that would take on outsourcing contracts from global telecom operators.

On the GSM front, RCom will initially outsource the operations of five circles — Himachal Pradesh, Haryana, Punjab, Jammu & Kashmir and Chhattisgarh — to Alcatel-Lucent.

The outsourcing deal also includes managing and strengthening RCom’s 175,000 km global optical fibre cable systems. The OFC system, of which 80,000 km is in India, is also used to carry international telecom data.

Related stories at

• http://economictimes.indiatimes.com/Reliance-Comm-may-give-contract-to-Alcatel-Report/articleshow/4634278.cms

RComm, Kribhco JV eyes rural cell market

From Hindustan Times on June 9, 2009

Kribhco and Reliance Communications Ltd (RComm) on Tuesday formed a joint venture — KRIBHCO Reliance Kisan Limited (KRKL) — to distribute RComm’s services through its network of more than 25,000 cooperatives throughout the country.

KRIBHCO will hold 60 per cent equity in the joint venture company with the balance 40 per cent held by Reliance ADAG group.

“The JV will market telecom products of RComm — both GSM and CDMA,” said SP Shukla, president, wireless, Reliance Communications.

“Later, KRKL will also distribute products and services of other business enterprises of Reliance ADAG including Reliance Capital, Reliance Entertainment and BIG TV DTH,” he said.

This is the second such marketing tie up to reach out to the rural area. Earlier, Bharti airtel did a similar tie up with IFFCO.

Related stories at

• http://www.business-standard.com/india/news/rcom-kribhco-to-form-jv/360632/
• http://www.thehindubusinessline.com/2009/06/11/stories/2009061150960400.htm
• http://economictimes.indiatimes.com/RCOM-ties-up-with-Krishak-Bharati-to-capture-rural-India/articleshow/4640234.cms

Emerging markets to steer global growth, says Sunil Joshi

On India Telecom News on June 9, 2009

Sunil Joshi, president of Tata Communications’ enterprise business for emerging markets, speaking at NetEvents 2009 Asia-Pacific Press Summit in Singapore said that his strategy is heavily focused on emerging markets. “And we would like to consider ourselves as emerging market specialists.”

We looked at the world and the emerging markets and we identified about 60 countries that had the potential, around the world, to look at for our engagement. We filtered it through the same mechanism, down to a list of 30 that are of priority for us. Of those 30, in the last year and a bit, we have gained presence or access to 24 out of the 30 and we’re well on progress of getting to the other six that we have outlined. But what does help us is a very structured way of engaging in emerging markets. The key thing for emerging markets is understanding local knowledge and having people on the ground. So whether it is investments in South Africa or it’s in India or it’s China, or Middle East, it’s about having [people] on the ground who actually understand the nuances of the market.

Our commitment to emerging markets — and please, this is not a communications sell, this is our intent to share with you how we have looked at the world and the emerging markets, those that we have chosen to apply our focus and our investments in. We announced a year ago our JV with China Intercom. And we’re well on the path of executing that as the processes go through.

We are building cable systems into Asia, which is up and running, which connects Singapore through Japan and connects Hong Kong, Vietnam and the Philippines on its way through our partners. Pipe will connect Guam to Sydney and also be able to connect onto the West Coast of the U.S. We have the Eurasia cable, the [IMAWE] cable, which will connect Mumbai through Middle East into Europe, and therefore into the Atlantic belt, thereby providing capability for emerging markets to be connected to various other emerging markets and mature markets. The Sub-Saharan Africa, the investment NeoTel, where we have 56% equity stake and thereby being able to participate in the growth of South Africa, as a strong geography for engagement. And the [Seacon] cable that connects Mumbai into South Africa, with various connections towards the east coast of Africa, thereby enabling us to help enterprises, businesses grow into geographies, but equally important, making investments in those geographies to grow the local economies as well.

This is just a simple example of the various cable systems that connect the world. Our business is all about connecting people and businesses, to be able to communicate. And if we are able to do that with the core infrastructure that we have built globally, and execute upon our emerging markets strategy and our vision, we’ll be doing okay.

Establishing [pops], which is our own capability in these emerging markets is important. Many of these emerging markets, we’ve established our own presence. However, there are some that we haven’t. And we then reach out to partners. So therefore, the ability to be flexible and have partnership arrangements with other telecommunications organisations to make it seamless for our customers to be able to get access to various geographies around the world and help them grow.

Newbusiness models.

Have people in the audience heard and experienced telepresence? Yes, some have? It’s obviously the next paradigm of collaboration. And telepresence in its conventional model, as it taught, could be procured and applied within your own enterprise and within the enterprise, it’s a closed group. However, we were the first service provider in the world to launch public rooms. Public rooms means you can go in and rent a telepresence room by the hour, which allows you not to have the necessity to buy, but to leverage the experience and the value of a telepresence for collaboration around the world. Obviously we’re building more rooms as we go. And then, at some point, when you’re ready, you can choose to, by yourself or continue to leverage a technology that will enable you to collaborate across the world without having the need to travel.

The next step of our telepresence journey is a global meeting exchange, which then connects various telecommunications companies together, regardless of telepresence on another service provider’s network, telepresence on our network, and for them to be able to talk, thereby protecting your investment and creating new business models to help customers grow in the geographies without having the necessary for a huge investment.

So in conclusion, the strong execution is really key for emerging markets. And we think that strong partnerships are really important, to be able to enter and gain entry into some of the markets that we’re not fully conversant with. The business model innovation becomes important. Many organisations out of the emerging markets have created paradigm shifts on how business models were previously construed, created not the need for a heavy capital-intensive investment, but maybe operationalising the investment, creating a pay-as-you-go model. And those are not normal models.

Business intelligence, of course information is key. Being able to assimilate the information regarding markets that you’re not familiar with, having partners that can give you that information, but also making the best out of the information you get. And obviously, leveraging research and consulting capability and the global infrastructure.

Our strategy is heavily focused on emerging markets. And we would like to consider ourselves as emerging market specialists. But more so, we’d like to have our customers consider us as emerging market specialists, as we have entered and most of our investments are being made into connecting and making sure that the emerging markets are connected to the rest of the world. So having points of presence or having investments in entities in the form of JVs or in terms of equity participation has enabled us to broaden our footprint and really give proof points to the market that this is a crucial area for growth, not just for us, but for almost every business that we’re looking at.

Juniper, Nokia Siemens to form carrier Ethernet JV

From www.ciol.com on June 8, 2009

BANGALORE, INDIA: Juniper Networks, a networking solutions provider, and Nokia Siemens Networks, a telecommunications services provider, announced a joint venture aimed at the carrier Ethernet market. 

The companies said the venture will be headquartered in the Netherlands and extend their previous partnership

This planned structure will allow both companies to contribute the necessary products and support to enable meeting the end-to-end portfolio needs of some 200 joint service provider customers worldwide

The solution consists of Juniper Networks MX Series Ethernet Services Routers, Nokia Siemens Networks A-series Carrier Ethernet Switches as well as Nokia Siemens’ end-to-end “point-and-click” network management system. 

Bernd Schumacher, head of Broadband Connectivity Solutions business unit, Nokia Siemens Networks, said: “Through the combination of the metro aggregation and metro access and network management strengths of each company, this planned partnership enables both Juniper and Nokia Siemens Networks to bring our joint vision of an extremely efficient, easy to manage unified Carrier Ethernet solution supporting all services on a single network to life.”

Manoj Leelanivas, senior vice president and general manager, Juniper Networks. “The combination of Nokia Siemens Networks’ leadership in metro access and network management and Juniper’s strength in Carrier Ethernet metro aggregation applications will enable our customers to more effectively monetize the network with new revenue-generating services and lower transport costs.”