Vivendi dials Datacom for 51pc stake
Thursday, 21 January 2010
MUMBAI, Jan 20 (Economic Times): Vivendi SA, the French media and telecom company which is facing a tariff war in its home market, is in exploratory talks to buy a stake in mobile licence holder Datacom Solutions, owned by the Videocon group, said a person familiar with the matter.
"Officials from Vivendi were in India last week and held two rounds of talks with Datacom team in Delhi," said a source privy to the discussions. "They want a majority stake. Both the sides will meet again in a few weeks to take the discussion forward." There is no certainty the deal would happen as many issues have to be agreed upon between them, he said.
Videocon group CMD VN Dhoot declined to comment. Vivendi press director Solange Maulini said, "we have no comment."
Global telecom companies such as Norway's Telenor, Japan's NTT DoCoMo and Russia's Sistema have bought stakes in Indian mobile operators as growth in their traditional markets plateau.
But the fallout has been that profitability of the established domestic players such as Bharti Airtel and RCOM are being squeezed since the new entrants look to grab a share of the fastest growing market in the world through cut-throat tariff plans. Phone calls are now being offered at half-a-paise a second.
"We estimate that in the given market conditions, Datacom's enterprise value could range between $1.6 billion and $1.8 billion, at 10-20 per cent discount to 2009 valuations," says Luca Ferro, managing partner with consultancy firm Value Partners India.
"Even though Datacom is better positioned than other new entrants mainly because of Videocon's distribution reach and cross selling opportunities, it lags other operators like Uninor in terms of service launch."
Sistema Shyam, the Russian company's venture with Shyam Tele, has about 3 million customers, and Uninor, the joint venture between Norway's Telenor and real estate company Unitech, has garnered 1.2 million subscribers in the first month.
India may fit the bill for Vivendi, which may be planning to raise the share of revenues from emerging markets to 24 per cent of the total from the current level of about 15 per cent of its more than 25 billion euros of revenue, analysts say. It bought a controlling stake in Brazilian telco GVT in November 2009.
"Officials from Vivendi were in India last week and held two rounds of talks with Datacom team in Delhi," said a source privy to the discussions. "They want a majority stake. Both the sides will meet again in a few weeks to take the discussion forward." There is no certainty the deal would happen as many issues have to be agreed upon between them, he said.
Videocon group CMD VN Dhoot declined to comment. Vivendi press director Solange Maulini said, "we have no comment."
Global telecom companies such as Norway's Telenor, Japan's NTT DoCoMo and Russia's Sistema have bought stakes in Indian mobile operators as growth in their traditional markets plateau.
But the fallout has been that profitability of the established domestic players such as Bharti Airtel and RCOM are being squeezed since the new entrants look to grab a share of the fastest growing market in the world through cut-throat tariff plans. Phone calls are now being offered at half-a-paise a second.
"We estimate that in the given market conditions, Datacom's enterprise value could range between $1.6 billion and $1.8 billion, at 10-20 per cent discount to 2009 valuations," says Luca Ferro, managing partner with consultancy firm Value Partners India.
"Even though Datacom is better positioned than other new entrants mainly because of Videocon's distribution reach and cross selling opportunities, it lags other operators like Uninor in terms of service launch."
Sistema Shyam, the Russian company's venture with Shyam Tele, has about 3 million customers, and Uninor, the joint venture between Norway's Telenor and real estate company Unitech, has garnered 1.2 million subscribers in the first month.
India may fit the bill for Vivendi, which may be planning to raise the share of revenues from emerging markets to 24 per cent of the total from the current level of about 15 per cent of its more than 25 billion euros of revenue, analysts say. It bought a controlling stake in Brazilian telco GVT in November 2009.