A new telecom giant in India?

Hi Everyone

Today it was reported in the Norwegian news (yes, in Norwegian I said!) that Telenor and Tata discuss to work together in the Indian mobile market. This is based on news from Bloomberg yesterday. Let me be clear that I have no connection to neither Telenor, Tata Teleservices nor NTT DoCoMo, so everything I write here is based on reports in the media and eventual my speculations…

Tata DOCOMO is today owned by Tata Teleservices (74 %) and NTT DoCoMo (26 %). Telenor is today part owner of Uninor, which it owns together with then Indian company Unitech. I think it is fair to say that this relationship has not been without its hiccups. Unitech are among the companies that is heavily involved in the 2G scam.

From the Bloomberg article it is not certain how the cooperation between Telenor and Tata Teleservices will be outlined. Some rumors in the market say that NTT DoCoMo are interested in increasing their share in the company. This is in strong contradiction to the fact that Tata Teleservices do have a buyout clause that they can use in 2014 to buy out their Japanese partner. One option is the off course that Telenor buy the 26 % that today is owned by NTT DoCoMo. Another possibility is that Telenor does by some shares from Tata Teleservices and that there will be three partners in Tata DOCOMO. What that will happen with Uninor and Telenors collaboration with Unitech is also very unclear. What is clear is that a merger between these two companies will lead to the fourth largest mobile company in India (After Vodafone, Airtel and Reliance).

So will Telenor be better suited in working with Tata than with Unitech? That off course remains to be seen. But what is clear is that it will then work with a more established telecom operator. Tata is off course on e of the absolute biggest business houses in India. And Telenor do have a quite good track record with most of its investments all over the world. It is surely an interesting prospect…

Talk to you soon!

Karsten

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One thought on “A new telecom giant in India?

  1. If true, I think it is great for Telenor. Tata follows the ethical standards and has the reputation, one would hope, Telenor looks for.

    On the down side, Who will maintan the final control of the company? Is Telenor just trying to cut its losses or is it still hoping to become a dominant player in the Indian market?

    One thing is for sure, Telenor should not expect the kind of sucess it has had in Bangladesh, Russia, Ukraine, Pakistan etc. Here telenor came in rather early, with a lot of capital, technical and managerial expertise. The markets were dominated by state owned comapnies, which were easy to compete with. In India, Telenor faces probably the worlds most competative market. Telenor neither neither has managerial, technical or financial avantage here.

    Reply

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