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Korea Telecom to buy stake in Tata Teleservices
By siliconindia staff writer
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Friday, 18 June 2004, 19:30 IST
NEW DELHI: Tata Teleservices Ltd (TTSL), the telecom arm of Tata Group, has begun talks to offer a large stake to South Korea's KT Corp, a business daily said on Friday.
TTSL, the second-largest provider of Code Division Multiple Access (CDMA) based mobile services, plans to offer 30 per cent of its Rs 40 billion ($879.1 million) equity capital to KT Corp, the report quoted unnamed sources as saying.
KT Corp is South Korea's top fixed-line phone operator and has a large wireless presence.
The daily said the stake would cost Korea Telecom about Rs 12.5 billion ($274.7 million). The money would be used to finance TTSL's nationwide expansion plans. Mumbai-based TTSL is in talks with other global carriers as well, the sources added.
Neither company could be reached for comment immediately.
India's fragmented mobile sector, the world's fastest growing wireless market, is in the middle of a series of mergers and acquisitions as several money-losing carriers are unable to fund heavy expansion costs.
The money-guzzling sector needs $50 billion by 2012 to boost phone penetration to global levels.
The industry offers both technology platforms -- CDMA and the its bigger rival the Global System for Mobile communications (GSM).
India has close to 36 million mobile users and the number is expected to cross 100 million by 2005, thanks to one of the cheapest call rates in the world.