Tata Comm may buy Tele’s en­ter­prise biz

Financial Chronicle - - TELECOM CONSOLIDATION -

TATA Com­mu­ni­ca­tions on Thurs­day said it will ex­plore the pos­si­bil­ity of ac­quir­ing the en­ter­prise busi­ness of Tata group firm, Tata Te­le­ser­vices.

This fol­lows Bharti Air­tel an­nounc­ing that the con­sumer mo­bile busi­ness of (CMB) of Tata Te­le­ser­vices (TTSL) and Tata Te­le­ser­vices Ma­ha­rash­tra (TTML)’s will merge with it on a cash-free, debt-free deal.

"Tata Com­mu­ni­ca­tions pro­poses to en­gage in ex­ploratory dis­cus­sions with TTSL and TTML re­gard­ing the po­ten­tial ac­qui­si­tion of its en­ter­prise busi­ness,” Tata Com­mu­ni­ca­tions said in a reg­u­la­tory fil­ing.

It added that its board met on Thurs­day and has in­structed the man­age­ment to ap­point in­de­pen­dent ad­vi­sors to “eval­u­ate the strate­gic fit as well as the fi­nan­cial mer­its of the po­ten­tial trans­ac­tion”. "The board will review the rec­om­men­da­tions be­fore mak­ing any fi­nal de­ci­sion,” it said.

Tata Com­mu­ni­ca­tions pointed that in the nor­mal course of op­er­a­tions, it looks at po­ten­tial op­por­tu­ni­ties in var­i­ous mar­kets in the best in­ter­est of the firm. "Tata Te­le­ser­vices has built a pow­er­ful as­set, serv­ing en­ter­prise cus­tomers in the fast grow­ing Indian mar­ket. We be­lieve this would be a good fit for Tata Com­mu­ni­ca­tions and its cus­tomers, and help to fur­ther strengthen Tata Com­mu­ni­ca­tions’ lead­er­ship po­si­tion in this seg­ment,” it said.

The strat­egy over­all is part of Tata Group’s plan to find a so­lu­tion for the trou­bled mo­bile busi­ness of the con­glom­er­ate. Tata Te­le­ser­vices, the mo­bile busi­ness, was weighed down by huge debt, spec­trum li­a­bil­ity and monthly cash losses. Tata Sons chairman N Chan­drasekaran had re­cently con­ceded that the group’s mo­bile busi­ness Tata Te­le­ser­vices is in a “really bad shape” and that a “tough call” will have to be taken.

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