Share this story!            

SingTel to expand India operations, spend $252m

SYDNEY/NEW DELHI: Sin-gTel, Southeast Asia’s largest phone company, said on Friday it plans to spend about US$252 million to raise its stake in Bharti Telecom as it ramps up investments in India’s fast growing telecoms market.

Facing a mature home market where nearly nine out of 10 people own a mobile phone, Singapore Telecommunications Ltd. has spent S$17 billion ($10.27 billion) in the past four years buying operators in high-growth Asian nations and expanding its investment in Australia.

India’s 53-million-strong wireless market is soaring as local call rates of as low as 2 US cents a minute, the cheapest in the world, pull in an average 1.7 million new users each month. The mobile user base is forecast to touch 80 million by December as carriers expand their networks to rural areas.

The opportunity is huge with only five among 100 Indians using wireless services in a nation of more than a billion, compared with more than 25 in China.

SingTel said its holding in unlisted Bharti Telecom, which owns 45.9 percent of group flagship Bharti Tele-Ventures Ltd., would rise to 32.81 percent from 26.96 percent after the investment.

The purchase will also increase SingTel’s holding in Bharti Tele-Ventures, India’s largest cellular services provider using global system for mobile (GSM) technology. “This has resulted in a marginal increase in SingTel’s beneficial interest in Bharti Tele-Ventures to 30.84 percent from 28.16 percent,” the Indian firm said. “We believe that SingTel’s increase in the stake is an expression of confidence in India,” said New Delhi-based Bharti Tele-Ventures, which has a market value of $9.2 billion.

Analysts said the deal would benefit both companies. “Bharti’s increased free float and solid fundamentals continue to raise its profile,” said Anand Ramachandran, director of Asia-Pacific telecoms research for Citigroup Smith Barney. “It stays as one of our top regional telco picks with a price target of 260 rupees.”

Bharti, a component of India’s main stock index, was trading 0.5 percent lower at 215.70 rupees, about in line with the broader Bombay market. In contrast, SingTel was amongst the top gainers in a flat Singapore market, up 1.9 percent at S$2.64.

In March, private equity investor Warburg Pincus sold 6 percent of Bharti for $561 million to a group of foreign funds. Warburg, which acquired an 18.52 percent stake in Bharti for about $300 million, still has about 6 percent.

Bharti Tele-Ventures competes mainly with Reliance Infocomm Ltd., which provides mobile services based on Code Division Multiple Access technology, state-run Bharat Sanchar Nigam Ltd. and the Indian wireless operations of the Hutchison group. Earlier this month SingTel Chief Executive Lee Hsien Yang had said China and India, with a combined population of more than 2 billion, would “continue to be on SingTel’s radar screen”.

“If we are given the opportunity to contribute more to Bharti and to the overall development of India’s telecommunications market, we will gladly do so,” he said.

Bharti Tele-Ventures, with 11.39 million GSM users and about 870,000 fixed-line customers, also said on Friday it had dropped plans to issue American Depositary Receipts against existing shares due to lack of interest from key shareholders. SingTel owns major stakes in three other Asian carriers — Thailand’s Advanced Info Service Plc. (AIS), Globe Telecom Inc. in the Philippines and Indonesia’s PT Telkomsel SingTel. reuters

Home | Business

Share this story!