Etisalat plans Asian expansion
UAE telco closes in on Reliance deal and plans major investment in Sri Lanka
UAE incumbent Etisalat looks set to strengthen its presence in the Indian Subcontinent with reports suggesting it is close to buying a 26% stake in Reliance Communications, India's second-largest mobile operator, and is also poised to invest some $163 million to expand its Sri Lankan operation.
Sources close to the negotiations between Etisalat and Reliance said that the deal was close to being finalised and could be completed by August, according to a report from UK broadsheet, the Financial Times.
The deal, which is thought to be worth about $3 billion, would give Etisalat an immediate presence in India, and also give Reliance, which has 100 million subscribers, additional funds for the roll out of its 3G network.
A deal with Etisalat could also give Reliance access to the UAE operator's African assets, which include operations in Central African Republic, Gabon, the Ivory Coast, Egypt, Niger, Nigeria, Sudan and Tanzania.
The report added that the two companies were also considering ways of merging Etisalat's Indian unit, Etisalat DB, with Reliance in a bid to overcome regulations that prevent a single company from holding stakes of 10% or more in two operators competing in the same area.
However, an earlier report from Dow Jones Newswires said that Etisalat had started talks to sell its stake in Etisalat DB.
In other news, Etisalat said it was planning to ramp up its investment in Sri Lanka. Etisalat, which entered Sri Lanka in 2009 through its $207 million acquisition of Tigo, intends to invest some 18.5 billion Sri Lankan rupees ($163 million) to expand its presence, with a particular focus on the north and east of the country, according to a report from AFP.
Dumind Ratnayake, CEO of Etisalat Sri Lanka, said the company, which has almost 3 million subscribers, planned to add 480 new base stations, taking the total to 1,580.
The company competes with four other mobile operators in Sri Lanka; market leader Dialog Telekom, Sri Lanka Telecom, Hutchison and Bharti Airtel.