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Singapore telecom companies dial into wireless India

FINANCIAL EXPRESS
Krishna Gopalan

There has been a visible change of mood in the telecom industry ever since the STT and Telekom Malaysia combine decided to pick up the 33 per cent stake held by AT&T Wireless in Idea Cellular. This deal, which is expected to conclude over the next two months, has an overall size of $200 million (Rs 900 crore).

STT is the telecommunications arm of the Singapore Technologies (ST) group apart from being its subsidiary. The good news for Indian wireless majors getting more investments from Singapore does not end here. Two weeks ago, the same combine decided to put in a bid to acquire a total stake of 49 per cent in Idea Cellular. There were quite a few bidders for this stake though an investment banker closely associated with the deal says that the combine was the keenest on picking up this stake. The value of this 49 per cent is estimated at $350 million (Rs 1,575 crore).

Has it been a case of Singapore telecom companies looking at India with more optimism than ever before? “They see more certainty on the regulatory front apart from India being very conducive to invest in,” explains Cellular Operators Association of India (COAI) director-general TV Ramachandran. That indeed is true since Singapore Telecom (SingTel) was among the earliest to put money in India when it picked up a 28.5 per cent stake in Bharti Tele-Ventures Ltd (BTVL).

The interest in India is not restricted to the GSM space alone. CDMA major Reliance Infocomm has been in dialogue with several investors for diluting a 10 percent stake in the company. Temasek Holdings is said to be the frontrunner on this deal. The deal, if it goes through, may well end up with Temasek putting in over $1 billion (in excess of Rs 4,500 crore) in Reliance Infocomm.

Industry observers succinctly point out that there are two reasons for the renewed interest in “Wireless India” - the saturation in most parts of South East Asia and the fact that India just cannot be ignored. “Singapore is a stagnant market today. Organisations in mature markets like Singapore look at those markets with high potential,” points out Gartner India’s principal analyst (telecom) Kobita Desai. She adds that India offers large opportunities and is relatively more open than China.

It is worthwhile to look at a futuristic scenario. If Temasek does pick up a stake in Reliance Infocomm, it would pose some interesting numbers. Out of the total 35 million strong wireless market, as many as 20 million will be accounted for by Singapore investee companies - Bharti, Idea Cellular and Reliance Infocomm. Interestingly, the market has been agog with news that Tata Teleservices is also in talks with Singapore-based investor companies to bring in investments for the company.

According to DSP Merrill Lynch’s joint managing director Amit Chandra, Singapore’s interest in India is just not telecom-specific. “India is an attractive destination today and Singapore has historically underinvested in India,” he says. Agrees COAI’s Mr Ramachandran, who elaborates that Singapore is definitely more bullish on India today. “India is the fastest growing wireless market. What is required is more clarity on the hike in FDI limit in telecom to 74 per cent and the way forward once unified licensing takes place,” he says. Once these are resolved, it is almost sure that Wireless India will see a flood of investments from Singapore.

© 2004 The Indian Express Online Media Ltd.

http://www.agencyfaqs.com/news/stories/2004/06/13/9233.html