Singtel's Stake in India's Major Telecom Group Hailed for Timeliness
August 9, 2000 - 0:0
SINGAPORE Singapore telecommunication's acquisition of a $400 million stake in India's largest private telecom services group was hailed on Tuesday as a "smartly timed" move with a huge long-term potential.
By entering the Indian telecoms market at an early stage, analysts said Singtel "will be able to tap into a fast-growing market which, given the numbers in India, will remain fast-growing for years to come." The single largest investment by a foreign company in India's telecoms sector was announced in New Delhi on Monday, with Singtel and the Bharti Group sealing an agreement giving Singtel a 20 percent and 15 percent stake in two subsidiaries Bharti Telecom and Bharti Televentures, respectively.
Singtel and the Bharti group first made contract for the partnership through Deutsche Bank less than two months ago. "Singtel's going into India in such a big way is heartening," said Anita Nayer, acting Indian high commissioner to Singapore, adding this type of big-value commitment was exactly what is needed. The new partners are planning on investing $150 million in a 3,500-kilometer undersea cable network linking the city-state and the southern Indian city of Chennai. Singtel chief executive officer Lee Hsien Yang said it remained undecided whether the network will be a stand-alone link or extended to become part of Singtel's $2 billion "C2C" project.
C2C is Asia's largest private submarine cable spanning Hong Kong, the Philippines, Taiwan and Singapore, with Singtel holding a 60 percent stake. The partners also plan projects in Bangladesh, Sri Lanka, Nepal, Pakistan, Bhutan and the Maldives. Singtel, which has pumped investments into more than 20 countries, is entering the Indian market at the ground level with the country's tele-density one of the lowest among the major economies of Asia with only 2.5 main lines per hundred people.
The move comes after a number of major policy mistakes were corrected in India with the government opening up the lucrative fixed-lined domestic long-distance sector to private companies, a Business Times commentary said. Under the previous policy, government companies "retained a stranglehold on the fixed-line segment," the commentary said.
(DPA)
By entering the Indian telecoms market at an early stage, analysts said Singtel "will be able to tap into a fast-growing market which, given the numbers in India, will remain fast-growing for years to come." The single largest investment by a foreign company in India's telecoms sector was announced in New Delhi on Monday, with Singtel and the Bharti Group sealing an agreement giving Singtel a 20 percent and 15 percent stake in two subsidiaries Bharti Telecom and Bharti Televentures, respectively.
Singtel and the Bharti group first made contract for the partnership through Deutsche Bank less than two months ago. "Singtel's going into India in such a big way is heartening," said Anita Nayer, acting Indian high commissioner to Singapore, adding this type of big-value commitment was exactly what is needed. The new partners are planning on investing $150 million in a 3,500-kilometer undersea cable network linking the city-state and the southern Indian city of Chennai. Singtel chief executive officer Lee Hsien Yang said it remained undecided whether the network will be a stand-alone link or extended to become part of Singtel's $2 billion "C2C" project.
C2C is Asia's largest private submarine cable spanning Hong Kong, the Philippines, Taiwan and Singapore, with Singtel holding a 60 percent stake. The partners also plan projects in Bangladesh, Sri Lanka, Nepal, Pakistan, Bhutan and the Maldives. Singtel, which has pumped investments into more than 20 countries, is entering the Indian market at the ground level with the country's tele-density one of the lowest among the major economies of Asia with only 2.5 main lines per hundred people.
The move comes after a number of major policy mistakes were corrected in India with the government opening up the lucrative fixed-lined domestic long-distance sector to private companies, a Business Times commentary said. Under the previous policy, government companies "retained a stranglehold on the fixed-line segment," the commentary said.
(DPA)