Telecom consolidation: Is Tata, Telenor alliance moving ahead?

Reports of a likely merger or stake deal between the Tata group and Norwegian telecom company Telenor have been doing the rounds for quite a while now. Both the companies have always denied any such move.

Today the Business Standard has again reported that both the companies have “appointed merchant bakers to explore options”.

According to the report, Telenor has appointed Citibank. The Tatas have roped in Lazard “to study all options for their telecom business”.

The telecom companies and the merchant banks have offered no comments on the report.

However, a merger or stake sale between the companies is likely to be a long way off because of the contentious one-time spectrum fee issue most of the telecom players have legally challenged.

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According to a recent report in the Economic Times, the government is planning to make payment of one-time telecom fee a condition for approving any M&A in the sector.

The telecom sector has not seen any merger or major stake deal ever since the 2G spectrum scam. There have been reports that Sistema may also bee looking to strike a deal with a local telecom company.

Another deal that has been in the works is that of Aircel. According to media reports, Malaysian owners of Aircel is looking to sell their stake in the Indian telco.

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However, a consolidation in the telecom sector is unlikely any time in the near future because the number of cases being fought in various courts.