The Hindu Business Line : Vodafone, DoCoMo in race for BPL stake

BPL Mobile is in talks with a number of foreign operators including Vodafone and DoCoMo for an equity-based strategic partnership. The company is also talking to the Essar Holdings but no decision or agreement has been formalised .

Speaking with Business Line, the BPL Communication Chairman, Mr Rajeev Chandrashekhar, said that a number of operators had evinced interest in partnering with BPL. "Though we have been looking for a strategic investor, we do not have any immediate requirement of funds this year so there is no time frame to close any deal. We have made an announcement of investing over Rs 600 crore in our existing mobile operations this year. Going forward, we may require fresh investments by early next year as we roll out mobile services in new circles," Mr Chandrashekhar said.

BPL has manadated Morgan Stanley to identify a potential partner, and the latter has reportedly valued the business at $1.4 billion. BPL's cellular business carries a debt burden of nearly $600 million.

While it is premature to speculate on the structuring of the deal, the possibility of Mr Chandrashekhar exiting the business completely `is not very real', informed sources said.

BPL sources said that while Essar had also evinced interest in picking up stake in the company, there were government regulations blocking the deal.

Sources said that a cellular operator from Russia had also approached for a partnership with BPL. Meanwhile, in a statement issued on Friday, the Ruia's promoted Essar Teleholdings said, "currently Essar owns just under 10 per cent of BPL Mumbai. We have had some discussions in the past regarding increasing our involvement in BPL but discussions have not reached any conclusion."

One of the hurdles facing Essar is the cellular licence condition, which stipulates that a company cannot hold more than 10 per cent equity in more than one operating company in a circle.

Both Essar and BPL have operations in Chennai and Mumbai. A similar problem has delayed the investment plans of Singapore Telemedia (STT) in Idea Cellular. BPL Mobile offers cellular services in Mumbai, Maharashtra, Kerala, Tamil Nadu, Pondicherry and Goa and has a subscriber base of 2.5 million.

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