The Times of India claims that UAE-based Emirates Telecommunications Corporation (Etisalat) is in advanced-stage negotiations to acquire a 25% stake in India’s second largest mobile network operator by subscribers, Reliance Communications (RCOM). Citing unnamed ‘market sources’ the report claims that in addition to the direct acquisition of the 25% stake, Etisalat would then seek to make an open offer to pick up a further 20% holding from the public; the total value of such a deal is estimated at INR180 billion (USD3.83 billion). Despite the Times’ assertion that ‘reliable sources’ also corroborated the story, Mahesh Prasad, president of RCOM, declined to comment, calling the rumours ‘speculation’, while an official Etisalat spokesperson also denied that such discussions were underway.
Should the deal actually move forward Etisalat will be required to sell its stake in its current Indian subsidiary, Etisalat DB Telecom; under existing regulations no single entity can hold more than 10% in two or more telecoms companies, and the UAE group has a 45% stake in the Indian company. While Etisalat DB holds licences to offer services in 15 of India’s 22 telecom circles it has yet to launch commercial services.