Etisalat has finally gained access to the Indian telecoms market, having agreed to acquire a 45 per cent stake in Indian GSM licensee Swan Telecom, at a cost of US$900 million, Comm. can reveal.
Etisalat has spoken of its determined interest in entering the burgeoning mobile market in India for over two years, and the licensing of six new GSM operators in India earlier this year has proved the opportunity to facilitate the actioning of this long-held ambition.
India has a mobile penetration rate of around 30 per cent, leaving significant scope for further growth
Swan Telecom is owned by the DB Group, and the Etisalat acquisition again highlights the premiums willing to be paid by the UAE operator in order to enter markets it believes to be of strategic significance. Pan-Indian licences were offered earlier this year at a cost of approximately US$400 million each, and Swan Telecom was not even one of the bidders to acquire such a licence, paying a lesser amount for a concession that extended to 13 of India’s 22 telecoms districts.
Reports in India suggest Etisalat will look to acquire a controlling stake in Swan Telecom amounting to 51 per cent or more, at a later stage, as foreign ownership regulations in India permit foreign ownership of Indian companies up to a level of 74 per cent.
Swan Telecom, which is likely to go to market under the Etisalat brand name, is set to launch commercial services in the first quarter of next year, and the Indian licensee is reported to be in talks with incumbent operators with respect to infrastructure sharing.
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