Batelco sells stake for Rs925 crore; is first telco to exit India
09 Feb 2012
Bahrain Telecommunications Co (Batelco) has become the first casualty of the 2G scam with the Manama-based company selling its entire stake in STel Pvt Ltd a week after the Indian Supreme Court scrapped 122 2G licences.
Batelco yesterday sold its entire 42.7-per cent stake in STel to its Indian partner Sky City Foundation Ltd for $174.5 million (Rs925 crore) - the same price it had paid in 2009 for acquiring the stake, making it the first foreign telecom firm to exit the Indian market.
On 2 February, the Supreme Court ordered the cancellation of all 122 licences won by 11 companies including STel that were granted after January 2008 for operating 2G mobile services in India, saying they were given in an arbitrary and unconstitutional manner (See: SC cancels all 2G licences, orders fresh spectrum auction).
The Supreme Court ruling came 14 months after the then telecom minister A Raja sold the licences at unbelievably low prices that could have cost the exchequer a potential $31-billion loss.
STel has a subscriber base of over 3.6 million and held licences in Assam, the north-east, Bihar, Orissa, Himachal Pradesh and Jammu and Kashmir. It is the 12-largest mobile services operator by subscribers in India from among 15.
STel is a joint venture between Batelco and Indian group Siva, whose chairman C Sivasankaran also founded Aircel, India's seventh-biggest mobile operator by subscribers.
