Report: Etisalat targets Idea Cellular

More consolidation in India wireless telecom ahead ! (Via GSMA)



UAE operator Etisalat is reportedly eyeing a stake in India’s Idea Cellular as part of ongoing efforts to boost its presence in the world’s second-largest mobile market. In an interview with Bloomberg yesterday, Etisalat’s CEO for international investments, Jamal Al-Jarwan, said that Idea was one of the “many options” the Middle Eastern group was looking at in India. However, he declined to comment on the status of rumoured talks with R-Com, India’s second-largest mobile operator, which yesterday said a separate deal to sell its towers business had collapsed, and it had begun discussions with other potential investors.
In June it was reported that Etisalat was in talks to buy a 25 percent stake in R-Com, but Bloomberg suggests that sixth-placed Idea could be a more attractive opportunity. It notes that Idea is currently India’s best performing telecoms stock and has about a third of the net debt of R-Com; Idea’s net debt is INR96.5 billion (US$2.1 billion), while R-Com’s net debt was INR284 billion at the end of June. However, any future investment in India by Etisalat is complicated by the fact that the UAE operator already owns around 45 percent in local operator Etisalat DB Telecom. Under existing regulations which prevent a single entity holding more than a 10 percent stake in two or more companies, Etisalat will need to sell this stake in order to invest in a rival operator. Neither of Idea’s two main shareholders – India’s Aditya Birla Group (46 percent) and Malaysia’s Axiata Group (19 percent) – were prepared to comment on the Bloomberg story.