The Singapore connection

After hectic rounds of meetings over the last few months, it was time to open the bottle of champagne. The group of 10-odd who had been clos...

After hectic rounds of meetings over the last few months, it was time to open the bottle of champagne. The group of 10-odd who had been closeted for hours in one of the rooms of the Hilton Towers, Mumbai, was celebrating the entry of Singapore telecom giant STT and partner Telekom Malaysia, into Idea Cellular.

The combine picked up a 33 percent stake of AT038;T Wireless in Idea Cellular in the first week of this month, for nearly 200 million Rs 900 crore.

The deal, which is expected to conclude over the next two months, has renewed hope among domestic wireless players for more investments from the South East Asian country.

Already the market is agog with news that Tata Teleservices is in talks with Singapore-based companies to bring in investments for the company.

Earlier this year, CDMA major Reliance Infocomm talked with several investors on diluting a 10 percent stake in the company. Singapore-based Temasek Holdings was the frontrunner for the deal, which requires an investment of over 1 billion Rs 4500 crore.

If the deal does go through, it would pose some interesting numbers. Of the total 35 million-strong wireless market in India, as many as 20 million will have the hand of a Singapore investee company 8212; Bharti, Idea Cellular and Reliance Infocomm.

Industry observers put forth two reasons for the renewed interest in 8216;Wireless India8217; 8212; the saturation in most parts of South East Asia and the fact that India just cannot be ignored.

Story continues below this ad

8216;8216;Singapore is a stagnant market today,8217;8217; points out Gartner India8217;s Principal Analyst Telecom Kobita Desai. 8216;8216;Organisations in mature markets like Singapore look at those markets with high potential.8217;8217; She says India is attractive since it offers large opportunities and is relatively more open than China.

8216;8216;They see more certainty on the regulatory front apart from India being very conducive to invest in,8217;8217; explains T V Ramachandran, director general, Cellular Operators Association of India.

The first to take the plunge in the Indian market was Singapore Telecom SingTel, which picked up a 28.5 percent stake in Bharti Tele-Ventures Limited BTVL in year 2000.

STT, the telecommunications arm of the Singapore Technologies ST group, has taken the second step this month. Two weeks ago, the company, along with Telekom Malaysia also put in a bid to acquire 49 percent stake in Idea Cellular, at an estimated 350 million Rs 1575 crore. According to DSP Merrill Lynch8217;s Joint Managing Director Amit Chandra, Singapore8217;s interest in India is just not telecom-specific. 8216;8216;India is an attractive destination today and Singapore has historically underinvested in India,8217;8217; he says.

Story continues below this ad

Agrees COAI8217;s Ramachandran. 8216;8216;India is the fastest growing wireless market. What is required is more clarity on the hike in FDI limit in telecom to 74 percent and the way forward once unified licensing takes place,8217;8217; he says. Once these are resolved, he says Wireless India will see a flood of investments from Singapore.