UAE's Etisalat Looking for Mergers, Acquisitions in India Within Next Year
Emirates Telecommunications Corp., the United Arab Emirates’ biggest phone company, is in talks for mergers and acquisitions with India’s Reliance Communications Ltd. to expand in the world’s second-largest wireless market.
Etisalat was “studying opportunities for M&A” with Reliance, India’s second-biggest cellular phone operator, Chairman Mohammed Omran told Bloomberg News in Sydney today, without elaborating. The company, based in Abu Dhabi, was also talking to other operators about deals, aiming to forge agreements within the next year, he said.
Purchasing a stake in an Indian cellular operator would give the Middle East carrier, also known as Etisalat, a foothold in a market set to approach 1 billion users, or more than three times the population of the U.S. Etisalat said earlier this month it’s considering investing in Idea Cellular Ltd., which also provides mobile phone services in India.
Etisalat received a license to operate in India in 2008 and plans to offer cellular phone services in the nation’s 15 circles, or coverage areas, where it has a permit.
“In terms of customers, we’re at a very initial stage in India, and we’re evaluating opportunities where we see value,” Omran said.
Calls to Gaurav Wahi, a spokesman for Reliance Communications, weren’t answered.
Reliance Communications shares were unchanged at 170.2 rupees at 9:50 a.m. in Mumbai after earlier gaining as much as 1.5 percent.
The company, controlled by billionaire Chairman Anil Ambani, will cut investment in capacity expansion as it aims to be debt free in three years. Reliance will spend 30 billion rupees ($669 million) in capital expenditure in the 12 months ending in March after investing a combined 350 billion rupees in the past three years, Ambani said in Mumbai yesterday.
Etisalat is also studying the resubmission of a proposal to raise its stake in Indian venture Etisalat DB Telecom Pvt., which was initially rejected by India’s Foreign Investment Promotion Board, Omran said. The carrier wants to increase its stake in Etisalat DB Telecom Pvt. to 50 percent plus one share from 44.73 percent, the company said in February.
India’s mobile phone market is forecast to exceed 993 million users by the end of 2014, researcher Gartner Inc. said in a July 15 report.
To contact the editor responsible for this story: Iain Wilson at email@example.com