In the past two decades, the telecom sector has witnessed significant financing activity in terms of mergers and acquisitions, initial public offerings (IPOs), private equity deals and foreign investments. tele.net has identified 20 noteworthy financings that brought about significant changes in the Indian telecom landscape…
VSNL gets privatised
Videsh Sanchar Nigam Limited (VSNL) was incorporated in 1986 as a public sector undertaking (PSU). In February 2002, the government divested 25 per cent of its paid-up equity capital in VSNL through a strategic sale to the Tata Group for Rs 14.39 billion. VSNL was acquired by the Tata Group and renamed Tata Communications in 2008.
Singtel picks up stake in Airtel
Singtel picked up stake in Bharti Airtel through multiple transactions and became the single largest foreign investor in an Indian telecom operator in 2011. As of September 2019, Singtel’s share in Airtel stood at 35 per cent.
Airtel lists on the stock exchanges
In 2002, Bharti Airtel became the first private telecom operator to come out with an IPO. The IPO was the first to be made through a 100 per cent book-building process and helped Airtel raise Rs 8.34 billion. The listing of its shares was completed within a record time of 10 working days.
Warburg Pincus concludes private equity deal with Airtel
In one of the most profitable deals in the telecom private equity space in India, Warburg Pincus invested $292 million in Airtel (Bharti Televentures) between 1999 and 2001. It exited Airtel in 2005 with a total realisation of $1.61 billion over time.
Hutch merges operations with Essar
In 2005, Hutchison consolidated its operations with Essar Telecom to form a new entity – Hutchison Essar Limited. The merged entity became one of the most sought-after operators in the country and was finally acquired by the Vodafone Group Plc in 2007.
Malaysia’s Maxis acquires Aircel
In 2006, Malaysia-based Maxis Communications acquired a 74 per cent stake in Aircel for $1.8 billion. The deal came under the scanner in 2011, when Aircel’s owner alleged that it had been pressured to sell its stake to Maxis.
Vodafone acquires stake in Hutchison Essar
In 2007, UK-based telecom major Vodafone Plc forayed into the Indian telecom market by acquiring a 67.5 per cent stake in Hutchison Essar for $19.3 billion. Slated as the biggest deal at the time, it brought the world’s largest telecom operator (in terms of revenue) to India.
Telecom rivals come together to form Indus Towers
In a unique initiative, market competitors Idea Cellular, Bharti Airtel and Vodafone Essar joined hands in 2007 to form an independent tower company, Indus Towers. Under the deal, the three companies merged their existing assets in 16 telecom circles to provide passive infrastructure services to all operators on a non-discriminatory basis.
Idea Cellular buys stake in Spice Communications
In 2008, Idea Cellular acquired a 40.8 per cent stake in its rival, Spice Communications, for over Rs 27 billion in shares and cash. The deal helped Idea consolidate its market position with its total subscriber market share increasing from 9.5 per cent to 11.1 per cent.
NTT DOCOMO acquires stake in TTSL
Japan-based NTT DOCOMO acquired a 26.5 per cent stake in Tata Teleservices Limited (TTSL) for about Rs 127.4 billion in 2009. The deal ended up in a three-year-long judicial tangle between Tata Sons and DOCOMO over the latter’s exit from the joint venture (JV). Finally, in May 2017, the Delhi High Court approved the terms of settlement and NTT exited from the JV.
Airtel acquires Zain’s African operations
In 2010, Bharti Airtel acquired Zain’s operations in 15 African countries. The $10.7 billion deal marked the second largest overseas acquisition by an Indian corporate after Tata Steel’s acquisition of Corus in 2007.
RIL acquires Infotel Broadband
Making headlines, Reliance Industries Limited (RIL) acquired Infotel Broadband, which emerged as the sole winner of the pan-Indian BWA licences in the June 2010 auction. RIL bought a 95 per cent stake in Infotel Broadband just a few days after the auction for Rs 48 billion. A landmark deal, it marked the entry of Reliance Jio, now the country’s largest telco, into the Indian telecom space.
Russian government picks up stake in SSTL
In 2010, the Russian government acquired a 17.14 per cent stake in Sistema Shyam TeleServices Limited (SSTL), a JV between Russia’s Sistema and India’s Shyam Group, for $600 million. Later, in 2016, Sistema acquired the Russian government’s stake in SSTL, and the government exited the venture.
Batelco exits S Tel
In 2012, the Bahrain Telecommunications Company (Batelco) sold its entire 42.7 per cent stake in S Tel for $175 million. The move marked the first exit of a foreign investor from the Indian telecom sector following the Supreme Court’s cancellation of 2G licences.
ATC acquires majority stake in Viom Networks
In 2015, the American Tower Corporation (ATC) acquired a 51 per cent majority stake in Viom Networks for Rs 76.35 billion to become the third largest tower company in the country. The combined entity had a portfolio of 56,000 towers.
Vodafone, Idea join hands
In 2017, Vodafone India and Idea Cellular decided to merge their operations in a $23 billion deal. The merger was completed in late August 2018 and led to the creation of Vodafone Idea Limited (VIL), which became the largest service provider in the country in terms of subscriber market share (till as recently as November 2019).
Airtel acquires Telenor and TTSL
In 2017, Bharti Airtel signed two deals to acquire TTSL and Telenor India. The deal with TTSL involved the transfer of assets in 19 telecom circles, while the one with Telenor comprised seven circles. The Airtel-Telenor merger was completed in 2018, while TTSL’s acquisition was concluded in 2019.
Bharti Infratel, Indus announce mega merger
In 2018, Bharti Infratel and Indus Towers announced their decision to merge, which is set to create one of the biggest telecom tower companies in the world. The combined entity will have a portfolio of 163,000 towers spread across all 22 telecom circles. The timeline for closing the merger deal has been recently extended to February 24, 2020.
RIL makes strategic investment in DEN and Hathway
In 2018, RIL picked up 66 per cent and 51.3 per cent stakes in DEN Networks, and Hathway Cable and Datacom Limited respectively for Rs 52.3 billion. The strategic investment helped the company accelerate the roll-out of its JioFiber services.
BSNL-MTNL to merge operations
Recently, in 2019, the union cabinet gave its in-principle approval to the merger of the two ailing telecom PSUs Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL). The aim is to turn around the combined entity to make it profitable over the next two years. While the merger announcement came as no surprise, it remains to be seen what kind of synergies the two ailing telcos can achieve to stay competitive.