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Etisalat closer to India's Reliance Etisalat poised to buy 26% stake in Reliance(Gulf News (United Arab Emirates) Via Acquire Media NewsEdge) UAE operator has to cut stake in existing Indian venture to below 10% to meet country's regulatory laws Dubai Emirates Telecommunications (etisalat) is close to buying a 26 per cent stake in Reliance Communications, India's second-largest mobile operator for $3 billion (Dh11.01 billion), media reports said. The Abu Dhabi-based operator has long been interested in the Indian market that it solidified two years ago by acquiring a 45 per cent stake in Swan Telecom, now known as Etisalat DB. While the alliance moves ahead between the two big players, etisalat must work around the regulatory environment of India that prohibits foreign companies from holding a stake of more than 10 per cent in two telecom companies. Alliance The alliance between the two groups could be completed as soon as mid-August, said a person close to the matter. Another person said it could take up to the end of the year, according to the Financial Times. Etisalat would either have to reduce its stake in Etisalat DB to below 10 per cent or merge existing interest with Reliance Communications. "Once etisalat has freed its hands, the deal could happen very quickly... both sides are very keen to join forces," said one person familiar with the matter. Another person said the two groups could merge to speed the completion of the operation, the newspaper said. "Even if it moves into Reliance it will get itself into tough, regulatory and competition law issues that they have to get around," Matthew Reed, senior analyst at Informa Telecoms & Media said. Etisalat is looking to strengthen its position in the country to replicate services and success it has seen within its portfolio of 18 international markets. Logical step "It's certainly a logical step for etisalat to try and expand its footprint, especially in India, which is such a huge market with rapid and substantial growth," Matthew Reed said. "Having said that, it's becoming intensely competitive and some of the operators are beginning to see profits adversely affected. There is a whole range of new licensees including etisalat's existing arm in India that is trying to establish in what is a difficult environment," he said. Etisalat did not confirm or deny the report. Etisalat, which aims to earn at least 50 per cent of its revenues from international markets, is facing tougher competition in its home market. Prompted by the local telecom regulatory authority, the operator signed an agreement to share its nationwide network infrastructure, opening up the country for du to expand with its fixed-line and broadband services. The second market entrant was previously restricted to free zones and freehold areas within Dubai. Telecom (c) 2009 Al Nisr Publishing LLC . All rights reserved. Provided by Syndigate.info an Albawaba.com company |