Telecom Lead Middle East: Bahrain Telecommunications
(Batelco) is planning to pick up stake in telecom operators in India.
Recently, STel, in which Batelco had 42.7 percent stake,
exited Indian business due to 2G spectrum license issue.
Batelco is unlikely to participate in India’s forthcoming
spectrum auctions, said Group Chief Executive Shaikh Mohamed bin Isa Al
Khalifa.
Bahrain Telecommunications is keen to invest in existing operators and not
start up companies, Khalifa added.
He however didn’t specify if Batelco is in talks with any Indian telecom
operator, according to media reports.
Batelco exit exposes troubles in weakening mobile industry
Bahrain Telecom (BATELCO) did not book any significant
returns when it sold its 42.7 percent stake in STel for $175 million to Sky
City Foundation.
Batelco had acquired 42.7 percent stake in STel via two
transactions in May and June 2009 for a total of $174.5 million.
The no-profit deal gives alarm bells to investors of the
burgeoning telecom industry. Recently, Airtel said the company’s effective tax
rate was 32.5 percent that brought down its net profit to Rs 1011 crore in Q3
2011-12 from Rs 1303 crore in Q3 2010-11.
According to Batelco, the carrying value of its
equity in STel was $123.3 million as on December 31, 2011. The agreed
time-frame for completion of the sale is the end of October, 2012.
STel has licenses in six of the 22 telecom circles, which
have been cancelled by the Supreme Court. It had 3.6 million subscribers.
It ranks 12th among 15 players by subscriber numbers.
The sale followed India’s Supreme Court’s order earlier
that month scrapping 122 telecom licenses issued January 2008, including six of
S Tel’s, saying the process followed was flawed and the permits given were
illegal.
India’s apex court then April 24 directed the government to hold auctions by
Aug. 31 to reallocate bandwidth, including those to be surrendered by affected
operators. It allowed those operators to continue operations till Sept. 7, an
extension from the earlier June 2 deadline. S Tel, however – soon after the
court order in February – said it is closing down its operations.
Batelco, last week, said its overseas users declined by about 40 percent,
largely due to an adjustment for the exclusion of its India operations.
editor@telecomlead.com
