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Telenor India in merger talks with Goldman Sachs-backed Tikona Digital for broadband spectrum business

In yet another big move in the telecom sector, Telenor India and is exploring a big-bang deal with the Goldman Sachs-backed Tikona Digital.

By: | Published: September 21, 2016 3:50 PM
Telenor India merger with Tikona Digital, Telenor Tikona merger Telenor India and Tikona are in “active talks” to merge parts of their broadband spectrum business.

In yet another big move in the telecom sector, Telenor India and is exploring a big-bang deal with the Goldman Sachs-backed Tikona Digital, reported ET Now. According to the channel, Telenor India and Tikona are in “active talks” to merge parts of their broadband spectrum business. The deal will give spectrum footprint to Telenor India and Tikona Digital in new circles. Telenor India and Tikona are looking to synergise their respective teams and operational capabilities, the channel said. The voice business may be kept out of the potential merger and the deal will likely focus on data business, the report said.

The news of this potential merger comes days after Reliance Communications and Aircel announced the merger of their mobile business. The merger has created India’s third-largest mobile firm by subscribers as well as spectrum holding. The combined entity has an asset base of over Rs 65,000 crore ($9.7 billion) and net worth of Rs 35,000 crore ($5.2 billion). Anil Ambani, Chairman of Reliance Group expects the combination to create substantial long term value for shareholders of both, RCOM and MCB. MCB is Malaysia’s Maxis Communications, which is the promoter of Aircel.

The deal came at a time when Reliance Jio has made an aggressive entry into the telecom sector, and is being seen as a credible threat to incumbents like Bharti Airtel, Idea Cellular and Vodafone. Mukesh Ambani-led Reliance Industries launched the Reliance Jio on September 1. The launch has created a huge buzz in the telecom industry and a raging war over points of interconnect is underway. Reliance Jio has been accusing incumbents of denying it points of interconnect, implying that its customers are unable to make calls to other network subscribers. Additionally, Reliance Jio has also said that the other big telecom players are denying people of the facility of Mobile Number Portability.

Also read: Can’t underestimate size and scale of Reliance Jio; but you can’t write off Airtel: Sunil Mittal

Recently, Sunil Mittal, the Founder and Chairman of Bharti Enterprises said that Airtel cannot underestimate the size and scale of Reliance Jio. ” There has been a big event in the market place, but you cannot write us off,” he said. Talking about the ongoing ‘points of interconnect issue’, Mittal said, “The term point of interconnect was not heard 5-6 years back. Point of interconnect is the right of every operator. I think the issue will be resolved in the next few weeks.”

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