Batelco forced to consider future in India

Batelco is understood to be reconsidering its Indian expansion strategy following the intensification of operating conditions in the mobile market and regulatory restrictions that are pushing up costs.

Batelco brought a 49 per cent stake in Indian’s S Tel for US$225 million in January 2009, although it later sold an 11 per cent stake to Global Banking Corp. for an undisclosed amount.

Peter Kaliaropoulos, Batelco’s CEO was quoted as saying the market was proving to be far more challenging than expected and that the slashing of phone call tariffs had been worse than even the “worst case scenarios” the company modelled when analysing the initial investment.

Kaliaropoulos added that S Tel had also suffered as a result of restrictions that the Indian government imposed on the import of telecom equipment from China last year.

The ongoing telecom licensing scandal is also making it difficult to raise funds for the company, although it has not been cited in any of the allegations so far.

S Tel has licenses to operate in six Indian states – Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, North East and Assam.