By IANS,
Dubai/New Delhi : The Middle East’s largest telecom services provider Etisalat is set to enter the booming Indian market after it bought a stake in the newly licensed Indian operator, Swan Telecom.
The United Arab Emirates (UAE)-based Etisalat announced Tuesday that it has bought a 45 percent stake in Swan Telecom by subscribing to newly issued shares for a cash consideration of up to $900 million, implying a post-money equity value for 100 percent of the company.
“Our entry in India, one of the largest and fastest growing mobile markets in the world today, marks an acceleration of our expansion strategy and brings to us an opportunity which matches the scale of our ambitions,” Etisalat chairman Mohammad Hassan Omran said in a company statement.
India has a mobile phone network of over 250 million subscribers and adds an estimated 8-9 million users every month. The network is second biggest after China and ranks ahead of that of the US.
“We are truly excited by the partnership with the DB Group and the prospect of building Swan Telecom into a leading telecom operator, emulating the successes we have achieved in similar situations elsewhere,” he added.
Swan Telecom’s remaining 55 percent of the shares are held by several entities, including the company’s main promoter, which is controlled by the Dynamix Balwas or DB Group, a Mumbai-based real estate and hospitality business group.
Swan holds universal access service licences (UASLs) in 13 telecom circles in India, and is in the process of acquiring UASLs for two more circles.
Together, these licences will enable the company to provide a full spectrum of telecom services, including GSM services, covering a population of over 900 million across India, according to the Etisalat statement.
In a joint statement, Swan chairman Vinod Goenka and managing director Shahid Balwa said that Etisalat’s experience in the global telecom market would help Swan in its operations.
“We believe that with Etisalat’s operational and commercial expertise and with our knowledge of the Indian market, Swan Telecom has the potential to become a leading force in Indian telecommunications,” they said.
While Citigroup Global Markets advised Etisalat in the transaction, Deutsche Bank acted as Swan’s advisor.
The Abu Dhabi-headquartered Etisalat has 64 million subscribers in 16 countries across Asia, the Middle East and Africa.
Established in 1976, it is one of the largest contributors outside the oil sector to development programmes of the UAE government.
Earlier in the day, Minister of Communications and IT A. Raja said: “I am told unofficially one of the companies which got spectrum in some of the areas is going to align with Etisalat… It is probably Swan.” Speaking on the sidelines of an India Post conference, he did not divulge any further details.