Axiata, Malaysia’s leading telco operator, is in talks to buy out a stake in broadband wireless access (BWA) operator Tikona Digital Networks Ltd as part of its strategy to increase presence in the Indian telecom sweepstakes.
The Malaysian telco which has already picked up a 5.91 per cent stake in Idea Cellular, the country’s fourth largest mobile operator, according to sources is in talks with the key equity stake holders in Tikona.
These include Goldman Sachs the largest shareholder, Oak Investment Partners and Everstone Capital Advisors which together hold 70 per cent stake in the company. Top sources say the other new investors who have been roped in by the company after it received its BWA licence include L&T Infrastructure which has around 10 per cent and Anand Rathi Securities. The original promoters of the company, former Reliance Communication employees –Prakash Bajpai and Rajesh Tiwari, have less than two per cent stake in the company.
A spokesperson of Axiata said: “Axiata does not comment on reports which are speculative in nature.” Gaurav Bhandari managing director Goldman Sachs Principal strategies based in the US, declined to comment. And Prakash Bajpai, CEO of the company, did not respond to an SMS query.
Tikona has won BWA or 4G spectrum in five key circles around the country includes Gujarat, Himachal Pradesh and Rajasthan and Uttar Pradesh east and west—for over Rs 1,058 crore. However even before BWA, the company started offering high speed broadband services across 20 cities by using un- licenced spectrum which is sanctioned by the government. It has one million subscribers across the country.
With the country about to witness a data revolution Tikona has to face tough competition in the 4G market. The company will come in direct competition with Reliance Industries, which has acquired pan-India spectrum to operate BWA across the country. RIL which is investing Rs 15,000 crore to roll out services expected by October this year is expected to offer broadband services at homes which will include data, television and voice.
The company also has to contend with other large telcos which include Bharti Airtel which has spectrum in three circles, and Aircel which has 4G spectrum in eight circles and is looking at offering customers seamless connectivity between various technologies-2G, 3G and 4G.
Reliance Industries in June 2010 agreed to pay $1 billion for a 95 per cent stake in Infotel Broadband Services Ltd. The deal was announced just hours after Infotel became the only company to buy wireless broadband licenses nationwide.
Tikona is expected to start offering 4G services sometime during the fiscal year beginning on April 1, one person with knowledge of the matter said. The company bought HCL Infinet Ltd., a unit of HCL Infosystems Ltd, according to a November 11 stock exchange statement.