Telenor India, a smaller GSM telecom operator, is reportedly looking at merging its data business with Goldman Sachs-owned Tikona Digital, which offers broadband services to home and business customers and had lately started providing 4G services in a few cities such as Varanasi.
According to an ET Now report, the talks between these companies are revolving around just the data business, and Telenor’s oice business may be kept out of potential merger. The report further added that the ompanies are looking to synergise respective teams and operational capabilities.
The potential merger will give spectrum footprint to Telenor India and Tikona Digital in new circles. The Indian telecom industry is already seeing consolidation happening among telecom operators. Reliance Communications is merging operations with Sistema Shyam Teleservices (MTS India) and Aircel, while Bharti Airtel has already bought Augure Wireless.
The Mumbai-based internet service provider Tikona was earlier in talks with India’s second largest telecom operator Vodafone for sale of its 4G spectrum in the 2300 MHz band. Tikona had bought 4G spectrum in the 2010 auctions in Gujarat, Himachal Pradesh, UP (East), UP (West) and Rajasthan for over Rs 1,058 crore.
According to media reports, Tikona Digital recently bagged an approval from the Foreign Investment Promotion Board (FIPB) for the issuance of CCDs worth Rs 267 crore to increase foreign equity to 76.73%.
Both Telenor and Tikona are currently running commercial pilots to offer high-speed 4G services in India. Telenor is also offering 4G services under test pilot across its 6 circles in Varanasi, Vizag, Amravati, Agra, Anand, Lucknow, Ranchi, Vijayawada, Tenali, Eluru, Bhimavaram, Dhanbad, Warangal, Dehradun, Guntur and Rajahmundry.
Telenor, which has commercial operations in UP (West), UP (East), Bihar (including Jharkhand), Andhra Pradesh (including Telangana), Maharashtra (including Goa) and Gujarat, had earlier said that it will not participate in the upcoming spectrum auction, indicating a possible exit from the market.
The proposed merger with Tikona would allow Telenor to tap into the country’s surging data market, which recently got a push from the entry of Mukesh Ambani-led Reliance Jio, which announced ultra-cheap data tariffs with free voice service.