UAE-based Emirates Telecommunications Corporation (Etisalat) has signed an agreement to acquire 45 per cent stake in India’s Swan Telecom for around $900 million (around Rs 4,140 crore). The deal puts the value of the Indian GSM service provider, which holds telecom licences in 13 circles, at around $2 billion.
The remaining 55 per cent stake in Swan Telecom is held by several entities, including the Dynamix Balwas Group, the promoter company, which is into real estate and hospitality.
“Our entry in India, the fastest growing mobile markets in the world after china, will accelerate our expansion strategy. We are truly excited by the partnership with the DB Group and the prospect of building Swan Telecom into a leading telecom operator,” Mohammad Hassan Omran, chairman, Etisalat, said.
The domestic telecom operator plans to launch its first telecoms operation during the April-June quarter of 2009, Shahid Balwa, managing director of Swan Telecom, said .
Swan Telecom is in the process of acquiring two additional licenses, increasing its total presence to 15 circles in the country. This will enable the company to provide a full spectrum of services, including GSM services, covering a population of over 900 million in the country.
According to telecom analysts, Etisalat will have to seek clearance from the Foreign Investment Promotion Board (FIPB) approval for the investments.
“We believe that with Etisalat’s operational and commercial expertise and with our knowledge of the Indian market, Swan Telecom has the potential to become a leading force in Indian telecommunications,” Vinod Goenka, chairman of the DB Group, said.
The transaction is subject to certain closing conditions. Citigroup Global Markets is advising Etisalat on this transaction, while Deutsche Bank is advising Swan Telecom, the firm said in a release here today.
Abu Dhabi-based Etisalat has operations in 16 countries, including Saudi Arabia, Pakistan and Egypt, and was looking at entering the Indian market, the second largest in terms of subscribers in the world.
