Airtel, Telenor India in ‘advanced’ merger talks, report claims

3 Jan 2017

According to sources quoted by India’s Economic Times, the country’s largest mobile operator by subscribers Bharti Airtel is said to be in ‘advanced’ talks to buy smaller cellco Telenor India in a deal that would involve Airtel taking on debt of INR15 billion (USD220 million). An unnamed person aware of the development told the paper: ‘The talks are quite advanced. Airtel is just looking at taking over a part of Telenor India’s debt while Telenor would need to take care of the balance loans.’

The report says that Norwegian-owned Telenor’s level of debt is believed to have put off other potential suitors in the Indian cellular market, including third-placed operator Idea, which sought an equity deal instead, although this did not fit with Telenor Group’s Indian exit strategy. Previously, Telenor had entered talks with various players including second-ranked Vodafone India, reportedly seeking around USD1 billion for its wireless spectrum assets, which have fallen in value over time, and are now worth an estimated USD810 million. The Economic Times’ source claimed that Airtel could justify taking on extra debt to gain Telenor’s 4G spectrum in seven Indian telecoms circles and put it in a better position to combat fast-growing newcomer Reliance Jio Infocomm, despite itself having consolidated net debt of over INR830 billion (as of end-September 2016). The report continues that Telenor India owes the government around INR19 billion in deferred spectrum payments, excluding any applicable penalties, and another INR18 billion to financial institutions.

India, Bharti Airtel, Telenor India