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Thomas K Thomas

New Delhi, Aug. 26 The Department of Telecom has given its approval to divesting the 30 per cent stake held by Telecommunications Consultant of India Ltd in Bharti Hexacom, a company which offers mobile services in Rajasthan.

The stake sale has been hanging in the balance for more than three years. The Government had so far taken a stance not to divest State-owned TCIL’s stake. However, with the Left withdrawing its support, political equation at the Centre has changed allowing the Government to move ahead with its divestment plans.

The decision to approve the stake sale was taken at a meeting of the Telecom Commission, the highest authority in DoT, on August 21. DoT will now take the proposal to the Union Cabinet for approval.

If TCIL sells its stake, Bharti Airtel will have the first right of refusal. Bharti had earlier expressed interest in acquiring the stake but could not do so without Government approval. Bharti already owns about 70 per cent stake in Hexacom after it had bought out majority shares from Shyam Telecom. Bharti had paid about Rs 430 crore for buying out Shyam’s stake in 2004.

Hexacom has 4.4 million subscribers at present. TCIL had wanted to exit the mobile company for more than two years as it wanted to focus on its core area of providing turnkey solutions. The company undertakes projects in India and foreign countries for rolling out telecom networks. It has also forayed into building roads.

DoT’s nod will benefit Bharti Airtel as it will have the option to increase its stake in the company and bring it in line with its other holdings across the country. Analysts said that Bharti may have to pay the Government as much as Rs 2000 crore for the 30 per cent stake. This will add to DoT’s efforts in generating more revenues from the telecom sector.

Apart from Hexacom the Government is also planning to sell a 10 per cent stake in Bharat Sanchar Nigam Ltd through an Initial Public Offering.

BSNL is hoping to raise about $10 billion through the IPO.

More Stories on : Disinvestment | Telecommunications | Bharti Tele-Ventures Ltd

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