Vodafone in Talks to Buy India's Tata Teleservices
Published on: 3rd Jan 2014
By: Ian Mansfield
Vodafone India is reported to be in talks to buy a local rival Tata Teleservices in a deal that could spark long expected consolidation in the market.
The Tata Group owns just under 60% of the mobile network, with the rest held by Japan's NTT DoCoMo. The Japanese company also holds a right of first refusal to buy the Tata's stake if it is put up for sale, but is itself generally thought to be looking to sell as well.
An unnamed source told the Economic Times that "Discussions are at an early stage. It is difficult at this stage to say what the outcome of these talks will be,"
The agreement between the Tata's and DoCoMo expires in March, and the company is generally expected to have missed minimum performance agreements. Under the circumstance's the Tata's could be required to either buy back the DoCoMo stake, or find an alternative owner for it.
A deal with Vodafone could see both companies extracting themselves from a poorly performing subsidiary, while Vodafone would be able to extract the usual cost savings and synergies to make the deal financially viable.
If the deal were to go ahead, the merged company would overtake Bharti Airtel to become the country's largest mobile network, with around 248 million subscribers.
On the web: Economic Times