Within days of the Supreme Court scrapping 122 2G licences, global telecom firm Bahrain Telecom (Batelco) on Wednesday announced the sale of its entire 43% stake in STel for $175 million (around Rs 925 crore).
Bahrain Telecom will be the first foreign telecom firm to exit the Indian market.
“This is a part of an earlier understanding with its Indian partner to exit, given the circumstances surrounding the 2G probe in India over the past 12 months,” Bahrain Telecom said in a statement.
Batelco had acquired 42.7% stake in STel through two transactions in May and June 2009 for a total of $175 million.
STel had bagged 2G licences in January 2008 in six circles.
“BMIC Limited, a 100% Batelco-owned subsidiary company, entered into an agreement, in the fourth quarter of 2011 to sell its 42.7% stake in STel for $175 million to its Indian partner Sky City Foundation Limited,” said Shaikh Mohamed bin Isa Al Khalifa, chief executive, Batelco group.
The sale has to be completed by October.
STel held licences in Assam, North-East, Bihar, Orissa, Himachal Pradesh and Jammu and Kashmir and the company has a subscriber base of over 3.6 million. It ranks 12th out of 15 players by subscribers.
STel officials could not be contacted for comments.
This comes close on heels of another global player Telenor, the majority shareholder in Uninor, writing off about $721 million after the Supreme Court’s decision.
UAE operator Etisalat, which owns 45% stake in India affiliate Etisalat DB, also lost its licence last week. Etisalat has said it would study the court judgement, but declined to say on whether it would now seek to exit the country.
India punch: Telenor in red
Norwegian GIANT Telenor posted a sharp profit fall for 2011 after taking a charge of 4.2 billion kroner (€550 million, $720 million) on its Indian unit after the Supreme Court cancelled 122 licences.
Net profit in 2011 fell 44.6% from the level a year earlier to 7.9 billion kroner in large part due to complications from its majority stake in Uninor.
“We are working to protect our investments in all possible manners, and will consider every option prior to any further investments,” said Jon Fredrik Baksaas, chief executive, Telenor. “We expect Indian authorities to conduct a swift and fair process.”