Carlos Slim reopens talks with Videocon for stake
28 May 2015
Carlos Slim, the world's second-richest man, is in discussions with the Videocon group as he eyes India's bulging telecom business.
The Mexican investor is looking at India as his next big bet and is closely watching the challenges telecom firms face in India's tough market.
Slim, the world's richest man after Bill Gates and owner of America Movil, had visited India two weeks ago to explore partnerships between his American Movil, Latin America's leading telco, and Indian business houses with telecom interests, according to reports.
Reports said the 75-year-old investor met Videocon Group chairman Venugopal Dhoot as well as senior executives of other mobile phone firms such as Bharti Airtel during his trip to India.
It makes sense for Slim to invest in India, the world's second-largest telecom market by subscribers where annual data growth is over 50 per cent.
In his home market of Mexico, growth of mobile services has fallen almost 17 per cent in two years after a reform specifically aimed at curbing Slim's power in the sector was introduced.
Slim, who is worth an estimated $74 billion, controls 70 per cent of Mexican mobile subscriptions and 80 per cent of fixed lines (paywall) through his company America Movil.
America Movil has been banned from charging national roaming fees over the past one year and a new law also banned it from charging competitors for interconnection to its network.
America Movil saw its 2014 fourth quarter wireless voice revenues plummet 15 per cent.
Besides telecom, Slim has interests in sectors such as education, healthcare, industrial manufacturing, food and beverages, real estate, airlines, media, mining, oil, hospitality, entertainment, technology, retail, sports and financial services.
Mexico City-headquartered America Movil, the world's sixth-largest carrier with 289 million mobile users, is looking at a 49-per cent equity (the present cap for foreign investment) in an Indian telecom company.
Videocon was also earlier reported to have received feelers from a Mexican company as well as an Indian telecom player looking to buy a 49-per cent stake.
America Movil has operations in 18 countries in the Americas and seven in Europe. It has a controlling stake in Telekom Austria AG, which also has businesses in Bulgaria, Croatia and Belarus.
Meanwhile, reports also said it is the third meeting between Slim and Dhoot, who had previously also met him in London after they were introduced by a common friend.
Videocon, one of the smallest telcos in India, is known to be keen to exit the spectrum-dependent mobility space and has also been approached recently by Norway's Telenor ASA for a stake sale.
However, any deal would be possible only after the government announces fresh rules on mergers and acquisitions (M&A).