Etisalat enters India

UAE’s telecom giant Etisalat entered India with the acquisition of 45% stake in the unlisted Swan Telecom for $900 million, into the world’s second largest wireless market valuing the Indian company at $2 billion. “Etisalat has signed an agreement to acquire about 45% of Swan Telecom, a recently licensed mobile operator in India,” the Dubai-based company said in a statement. Etisalat chairman Mohammad Hassan Omran said: “Our entry in India, one of the largest and fastest-growing mobile markets in the world today, marks an acceleration of our expansion strategy and brings to us an opportunity which matches the scale of our ambitions.We are excited by the partnership with the DB group and the prospect of building Swan Telecom into a leading telecom operator, emulating the successes we have achieved in similar situations elsewhere.”
The acquisition would be done by subscribing to newlyissued shares for a cash consideration of up to $900 million, implying a post-money equity value for 100% of the company of up to $2 billion, the statement said. Telecom minister A Raja said he has been informed of the deal unofficially and would officially see it when Etisalat applies for Foreign Investment Promotion Board approval. The deal between Etisalat and Swan would become a benchmark for the prospective global telecom companies looking at India. The remaining 55% of the shares in Swan Telecom are held by several entities, including the promoter of Swan Telecom, which is controlled by the Dynamix Balwas group, a Mumbai-based real estate and hospitality business group.A senior official from Swan Telecom said, the company will be launching the first operation in the first quarter of the next financial year.
Swan Telecom holds universal access service licenses (UASL) in 13 telecom service areas in India and is in the process of acquiring it in two more. Together these licences would enable the company to provide a full spectrum of telecom services, covering a population of over 900 million across India. The transaction is subject to certain closing conditions. Citigroup Global Markets is advising Etisalat on this transaction, while Deutsche Bank is advising Swan Telecom.