SingTel seeks to raise stake in Indian arm

Has sought approval from FIPB to increase stake in SingTel Global (India) to 100% from 74% at present

Singapore-based telecommunications major SingTel has sought approval from the Foreign Investment Promotion Board (FIPB) to increase its stake in SingTel Global (India) Private Ltd, which provides international long distance (ILD) services in India, to 100 per cent from 74 per cent at present.

If allowed, it woud be the first foreign telecom company to increase its investment in India after the government decided to allow 100 per cent foreign direct investment (FDI) in the sector. SingTel had given its proposal in September, within a month after the FDI decision.

In SingTel Global (India) Pvt Ltd, Bharti Enterprises has a 9.9 per cent stake and Leela Lace Software Solutions Pvt Ltd holds 16.01 per cent. The remaining stake is held by SingTel Australia Holdings Pte Ltd (73.9999 per cent) and INS Holdings Pte Ltd (0.0001 per cent). SingTel Australia Holdings Pte Ltd is a wholly owned subsidiary of Singapore Telecommunications Ltd.

WIDENING THE NETWORK

• SingTel Global (India) Private Ltd provides international long-distance services in the country
• Bharti Enterprises Ltd & Leela Lace Software Solutions have  9.9% & 16.01% stakes, respectively, in SingTel Global (India)
• The buzz is that both Bharti & Leela Lace want to exit the company
• Sing Tel  eventually wants to acquire the 26% stake in the company left up for grabs

According to the proposal, Bharti Enterprises and Leela Lace want to exit and SingTel Australia Holdings Pte Ltd wants to acquire their combined 26 per cent stake. While SingTel Global (India) Pvt Ltd provides ILD services in India, it also has a national long distance licence.

SingTel did not disclose how much it would invest in acquiring the stake. According to data published by the Telecom Regulatory Authority of India, gross revenue of ILD service providers in India was Rs 3,141 crore during the quarter ended March, 5.8 per cent of the gross revenue of the entire telecom sector in India (Rs 54,284 crore for the quarter). Cumulative adjusted gross revenue (AGR) of ILD service providers was Rs 1,277 crore.

The cumulative gross revenue of ILD operators in India would be about Rs 12,500 crore.

SingTel group’s operating revenue for the year ended March 31 was S$18.2 billion (Rs 89,856 crore).

 

SingTel started the business in December 2007 to start offering ILD services through a separate licence.

 

Meanwhile, the Central Bureau of Investigation (CBI) has, in February this year, filed a case of cheating and criminal conspiracy against SingTel, Bharti Airtel and Tata Communications for causing a loss of about Rs 48 crore to the Government exchequer since 2004, by providing ILD services illegally.

 

In August, SingTel increased its stake in Bharti Airtel to 32.34% from 30.76% for about USD 302.2 million. 

 

Earlier, SingTel had a separate joint venture with Bharti for submarine cable network. The cable joint venture between Singapore Telecom and Bharti started selling capacity in 2003. In 2007, Bharti became its sole owner. In April this year, Mukesh Ambani-led Reliance Jio Infocomm signed an agreement with Bharti Airtel that enables Reliance Jio to have exclusive right to use Bharti’s 3,100-km submarine cable i2i connecting Chennai to Singapore.