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Datacom Solutions in talks with South African telecom major for investments, technology.
Datacom Solutions, promoted by consumer electronic goods maker Videocon Industries, is close to roping in South African telecom major MTN group as a partner for its GSM foray in the country.
According to sources, Datacom, which was scouting for a partner to bring in investments and technology, has short-listed MTN. Discussions with the South African company are in the final stage and a deal is expected to be signed soon.
It was not immediately clear how much stake Datacom was willing to offer a foreign partner, or whether the agreement would be based on a different model.
When contacted, Videocon Industries Chairman and Managing Director Venugopal Dhoot said the company was in discussions with various players.
He declined to give any details, citing a non-disclosure agreement with foreign telecom companies Datacom was in discussions with.
Responding to an e-mail, an MTN spokesperson said that "in line with its vision to be a leading telecom services provider in emerging markets, the group continued to seek appropriate, value enhancing expansion opportunities that meet its investment criteria." However, the spokesperson would not comment "on specific activities at this time".
Datacom is one of eight players that have been recently given licences to operate pan Indian mobile networks. Some others are Unitech group, Shyam-Sistema, S-tel and BPL-promoted Loop Telecom.
Numerous international telecos and private equity funds have shown interest in investing in these new Indian telecom companies which will require large funds to build their networks.
Among these companies are AT&T, United Arab Emirates-based National Telecom Company and Russia's Alpha Group.
Current government policy allows foreign direct investment in telecom up to 74 per cent. MTN group is a mobile telecommunications company with operations in over 21 countries across Africa and West Asia, including Cameroon, Congo, Cyprus, Ghana and Afghanistan.
MTN, launched in 1994, had more than 40 million subscribers as of December 2006. Datacom, which has received GSM spectrum in the Tamil Nadu circle, has lined up an investment of over Rs 6,000 crore (Rs 60 billion) for its GSM rollout.
The company recently signed on former Alcatel-Lucent chief Ravi Sharma to head the venture, the first instance of a global telecom infrastructure head moving over to a service provider.
The company has been awarded Universal Access Service Licence, which permits it to begin telecom operations in all the 23 circles.
The company also leads the queue for spectrum allocation in these circles, except Mumbai and Delhi, where it is in second position. Datacom expects to rope in over 40 million subscribers in five years and break even in a couple of years.
