Bahrain telcos interest in Indian telcos

The Bahrain Telecommunications Co, is planning to buy a stack in and Indian wireless field. For this to move further the talks are going on with four companies. The CEO of the Bahrain Telecommunications, Peter Kaliaropoulos confirmed the news and said “They are all listed companies. It’s a natural growth opportunity for us to pursue relations with those companies. Most likely we will buy into existing operation.
The other rivals and competititor of Bahrain telcos in its own company are Etisalat, Zain which is Kuwait’s largest telecommunications company, Qatar Telecommunications etc. Like these big companies in the country, the Bahran telcos also decided to expand its business outside the country.

Hurdles in MTN’s merger in Bharti Airtel

In the process of Bharti Airtel acquisition of MTN, a new hurdle has come. According to Indian regulatory rule foreign holding in a telecom company could not exceed 74%. As per sources MTN wants 50% of the deal should be done in cash and the rest through share-swap. In case Bharti pays $25 billion cash, it will have to issue fresh shares worth $25 billion to MTN shareholders to complete the deal. Bharti holds around 65% of the holding with foreign entities. If Bharti does the insurance of its fresh shares worth $25 billion to MTN’s shareholders then it will exceed the foreign holding in the join entity to 78% which is not against the Indian FDI norms
The merging is also facing a problem other than the above. As per African norms 20% of merged entity’s shareholding should be with black investors. But in this merger if cash component exceeds then proportion of black investors might go doen below statutory requirements.
The historic deal between Bharti and MTN is now in the hands of banker who can only make it ensure that the deal goes through without violating regulatory norms.