Batelco sells India unit stake after court verdict
Manama, February 8, 2012
Bahrain Telecommunications Company (Batelco) has agreed to sell its 43 per cent stake in Indian affiliate STel for $175 million, in the first foreign exit since India scrapped 122 telecoms licences last week as part of a corruption probe.
Batelco will sell the stake to India partner Sky City Foundation and will receive the same price it paid to acquire its holding in STel in 2009, the Bahraini operator said on Wednesday.
On February 2, India's judiciary scrapped 122 licences held by eight operators amid a 2G telecoms scandal.
Batelco said the deal would be completed by the fourth quarter. STel was not immediately available for comment.
'This is a part of an earlier understanding with its Indian partner to exit, given the circumstances surrounding the 2G probe in India over the past 12 months,' Batelco said in a statement.
The now-revoked licences were awarded in 2008, before Batelco bought into STel.
STel had 3.6 million customers as of December and ranks 12th out of 15 players by subscriber base. It has licences for six of India's 22 zones.
India's older mobile carriers such as Bharti and Vodafone's local unit are seen as major beneficiaries of the court ruling last week to revoke licences given to newer companies.
The ruling is likely to accelerate the winnowing of an industry that has long been seen as ripe for consolidation.
United Arab Emirates operator Etisalat owns a 45-percent stake in India affiliate Etisalat DB which also lost its licence last week. Etisalat has said it would study the Indian court judgement, but declined to say on whether it would now seek to exit the country. - Reuters