Telecom industry sees mergers and acquisitions worth $9 bn

Telecom industry sees mergers and acquisitions worth $9 bn

New Delhi: The fast growing Indian telecom industry has seen mergers and acquisitions valued at over $9 billion this fiscal, unfazed by the global slowdown that resulted in lesser number of global M&A deals, an industry survey said today.

In fact, consolidation in telecom industry accounted for one-third of the total M&As in the country. The largest of around 20 deals this year was the buyout of 26% stake in Tata Teleservices by Japanese major NTT DoCoMo Inc, an Assocham EcoPulse study said. “The 2.7-billion dollar deal enabled the Japanese giant’s entry into the world’s fastest growing telecom market, which has over three times the number of subscribers in Japan," the study said.

In another deal, Dubai-based Emirates Telecommunications Corp (Etisalat) bought out 45% stake in Swan Telecom for cash up to $900 million.

Idea Cellular acquiring 40.8% stake in Spice Communications for $679 million dollar was among the major domestic deals in the last eight months of this fiscal. The study revealed that most of the telecom deals were inbound with foreign companies infused about $8.06 billion. The valuations of deals between domestic players, however, remained relatively less.

“The robust deal activity in the telecom sector gains significance in the backdrop of decline in the global merger volume by almost a third in 2008 due lack of credit," the study said, adding the sector is expected to continue to grow at rapid momentum despite all odds.Indian telecom market is the fastest growing in the world, where it is addingabout 10 million subscribers per month. The industry has shown outstanding results. Sales for the top firms have increased by 30% for the quarter ended September 2008.