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Sistema Close to $3 Billion Deal to Buy Another Indian Mobile Network
Published on:
Russia's Sistema is reported to be close to a deal that would see it buy a controlling stake in the Indian mobile network, Aircel for around US$3 billion.
Sistema already owns a majority stake in Sistema Shyam TeleServices, which trades as MTS India, but that company had its GSM licenses cancelled by the Supreme Court earlier this year as part of the 2008 scandal.
Buying a majority stake in another network and potentially merging with MTS India's GSM customer base would be one way for the company to continue operations in the country without bidding for replacement licenses in the forthcoming auction.
The company would still have to bid for replacement CDMA licenses, or be willing to migrate those customers to a GSM/3G platform.
The other potential hurdle is a limit on a company with a majority stake in one phone network owning more than 10% in another. This may be evaded by merging the two companies or structuring the deal so that it comes into effect if/when SSTL is closed down.
Aircel, with 65 million customers is currently 74% owned by Malaysia's Maxis Communications. There have been allegations in the past that Maxis' effective holding in the company could be as high as 99.3% thanks to irregular preference shares held in the other shareholders.
Tags: [sistema] [aircel] [India]
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