Tata Tele, Hughes merger imminent

Hughes Network Systems and Tata Telservices are in their final stages for a
possible merger with its local fixed line unit Hughes Tele.com. S Ramakrishnan,
MD, TTL stated this while launching the basic telephone services by the last
quarter of the current year in Gujarat followed by Delhi, Karnataka and Tamil
Nadu where it will invest not less than Rs 1,200 crore.

With TTL not interested in IPO in the near future, the company officials said
a strategic partnership would be the ideal platform. “From the current Rs 150
crore revenue, the upcoming telecom company expects to double its revenues with
a target of 6o lakh subscribers in as many years,” said Ramakrishnan.

The group also plans to start WLL services in major cities of Gujarat, said
Jagrut Vyas, COO (Gujarat circle).

But, for such an ambitious target, TTL will also need huge funding.
Ramakrishnan said that the Tata group will bring in about Rs 1,400 crore through
equity and some Rs 300 crore by lending from IDBI or through AP circle. The
other option that TTL has under its sleeve is the merger whereby the
infrastructure and subscriber base will automatically transfer.

TTL had signed a MoU with Hughes in April regarding the negotiation of merger
latest by June end after an initial negotiation pact was called off in January
in the wake of unsatisfactory valuations. But, in case of a merger, the analysts
said, both the companies will benefit.

Cyber News Service

(CNS)