Telenor to partner with Tata Teleservices: Sources

Norway's Telenor and Tata Teleservices could strike a strategic alliance The Hindu Business Line reported citing sources close to the development. Initial rounds of discussion have been held between the two companies and they will take a final call after the rules for the upcoming auctions are clear, the paper said.

The two companies are said to have discussed a number of options including merging Uninor's assets with Tata Teleservices. The other option involves either a part of full acquisition of NTT DoCoMo's stake in the company by Telenor, depending on the Japanese telecom major's decision on the upcoming call option.

Telenor has been looking for a strategic partner after it fell out with Unitech. It was also considering options of partnering Viom, a joint venture between Tata Teleservices and Srei Infrastructure.

Sterlite Industries is also said to be another prospect for Telenor.

NTT DoCoMo, which has a 26-per cent stake in Tata Teleservices, could increase or sell its stake in Tata Teleservices under a call option the two parties had agreed to four years ago. NTT DoCoMo can either take its shareholding from the current 26 per cent to 49 per cent or decide not to exercise the option and sell the entire stake back to Tata, in case the company were to fall short of acheiving certain performance-related milestones.

The report added Tata Teleservices might have failed to achieve the milestones, giving the Japanese major reason to exit. The Tata Group holds a 60-per cent stake in the telecom venture, while Singapore-based Temasek and Chennai-based C Sivasankaran being minority investors, with 7 per cent and 6 per cent stake each.

The Hindu, citing sources close to Telenor said various permutations and combinations were being explored with multiple players but a final deal could be done only after the dispute with Unitech was amicably resolved. The spectrum auction policy clarity would also be a critical factor for valuation purposes.

The Norwegian company already has business links with the Tata Group including a global IT services venture with TCS; also all its towers have been rented from Viom, a joint venture between Tata Teleservices and Srei Infrastructure.