Telenor reported to looking to merge with Tata Teleservices in India

Telenor is reported to be in talks to merge its Indian operation with those of Tata Teleservices, to provide a stronger competitor to the country’s established major players, Reuters reports.

Such a deal would see Telenor taking a majority stake in the merged entity, with Tata Group reducing its holding. Japan’s NTT DoCoMo, which is also a Tata investor, is set to maintain its stake in the enlarged operation, the report said.

Apparently, the joint business will have permits to operate in all of India’s 22 telecom service regions.

Wireless Intelligence figures show that Tata is currently the sixth largest operator in India, with 78.4 million subscribers, while Uninor is eighth with 42.1 million – although both are set to close some operations in the future.

The combined business is likely to move into fifth place in the market, behind Airtel (185.9 million subscribers), Vodafone (152.7 million), Reliance Communications (134.8 million) and Idea Cellular (115.5 million).

Telenor last week spent US$730 million for spectrum licences in six of the country’s most populous zones, covering a total population of 600 million. It was not awarded permits for Mumbai, Kolkata and West Bengal, where it will now close its units.

Tata withdrew its application for additional frequencies suitable for CDMA networks, with the company currently offering services using CDMA and GSM. It is set to close its operations in Jammu and Kashmir early in 2013, having had its licences cancelled.