The United Arab Emirates largest phone company is currently in discussions with Indian telecoms major, Reliance Communications Ltd for possible mergers and acquisitions. Emirates Telecommunications Corp. (Etisalat) is in a quest to increase its offering in India, considered the second largest wireless market in the world. Mohammed Omran, Etisalat chairman said the UAE firm was studying potential prospects for mergers and acquisitions with India’s Reliance.
Reliance Communications Ltd is India’s second largest cellular phone operator. Mr. Omran was speaking to Bloomberg News when he outlined the firm’s plans for an Indian investment, but did not provide further details. Headquartered in Abu Dhabi, the Etisalat chair said the firm is as well in discussions with other operators over potential deals, targeted at forging agreements in the coming one year.
Etisalat hopes the Indian investment will enable it obtain a better and robust foothold in the country’s market, currently estimated to be close to 1 billion phone users. Earlier this month, the firm said it is mulling an investment in Idea Cellular Ltd, an Indian mobile phone services provider. Even so, the UAE firm got its operating license in India two years ago, and is planning to provide cellular phone services in India’s 15 circles, or coverage areas for which it owns a permit.
The firm however conceded that its customer base in India is still budding, and it is considering opportunities in firms or investments that have value, said Omran. Reliance Communications was not readily available for comment, said the reports. However, the Anil Ambani controlled Reliance Communications Ltd plans to cut investment in capacity expansion mainly targeted at making the firm debt free in a period of three years.
In that regard, Reliance will evidently spend 30 billion rupees in capital expenditure in the coming one year, ending March 2011, after a total 350 billion rupees were invested in the last three years, said Ambani, Reliance chairman as well. Other than that, Etisalat is as well considering the resubmission of a proposal to raise its stake in Indian Venture Etisalat DB Telecom Pvt that was initially turned down by India’s foreign investment watchdog, the Foreign Investment Promotion Board (FIPB).
Etisalat wants to increase its stake in Etisalat DB Telecom Pvt. to 50 percent plus one share from 44.73 percent, the company said back 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.
Tags: FDI in Telecommunications, FDI India, foreign investment in Telecommunications, India investments, investments in Telecommunications, investments India, Telecommunications companies, Telecommunications FDI, Telecommunications foreign investments, telecommunications india, telecommunications investments, Telecommunications news