Norwegian operator reportedly talking to RCom-Aircel about tie-up, but deal with Bharti is still on the table.
Telenor may have changed its mind regarding an exit from India should reports of a three-way merger between the Norwegian telco and local operators Reliance Communications and Aircel prove correct.
The operator has made overtures towards RCom and Aircel with a view to brokering a deal that would leave it with a 10% stake in the merged entity, the Economic Times reported on Monday.
The paper’s claims came in the wake of Vodafone’s confirmation earlier in the day that it is in talks over a possible tie-up with Idea Cellular. Telenor was said to be in talks to sell its Indian business to Idea Cellular late last year. Vodafone was also linked with Telenor last year.
Discussions between Telenor, RCom and Aircel began around a month ago, but have been unable to progress in recent weeks due to a pending decision from India’s supreme court regarding Aircel’s licence, the paper quoted an unnamed source as saying.
The source, an executive aware of the ongoing talks, said the court should make a decision on whether or not to quash Aircel’s licence later this week. The operator is embroiled in a corruption case that dates back to Maxis’ acquisition of a 74% stake more than a decade ago. Should the court pull Aircel’s licence, the merger deal it inked with RCom in September would fall apart, the executive said.
That would presumably have a knock-on effect on Telenor’s plans.
The Norwegian firm has other options open to it though.
Earlier this month Indian mobile market leader Bharti Airtel confirmed that it was holding talks to acquire Telenor India.
That deal is still alive, a separate Economic Times source said, while a third explained that Telenor will take whichever deal is likely to close the quickest, such is its hurry to exit the market.
Competition has ramped up in India in recent years, with many smaller operators struggling to compete against a handful of dominant players. Meanwhile, the arrival of Reliance Jio Infocomm, which has triggered widespread price cuts over the past few months, has led the big guns to seek to bulk up further.