SingTel pledges support for Airtel consolidation drive in India
The telco wants its Indian associate to lead a consolidation of the domestic market, which SingTel chairman Simon Israel believes the sector "desperately" needs. He did not rule out injecting new funding to support the move.
SingTel is backing its Indian associate Bharti Airtel, which it has a 32 percent stake in, to lead a consolidation drive of the local telecoms industry.
"India desperately needs consolidation. Globally, the mobile industry is a scale game," said Simon Israel, chairman of SingTel, in an Economic Times report on Thursday. India currently has over 10 carriers including state-owned telcos MTNL and BSNL, Reliance, Vodafone, and Idea.
Israel added Asian markets typically had three major players, with the rest in the fringes. "India is a bigger market, so maybe it can have 5 to 6 players," he noted.
In response to ET's query whether SingTel would fund Airtel's consolidation moves by raising its investment, Israel said: "When that question arises, we will like to sit with the shareholders of Bharti and play our role. We would want the Bharti board to come back to us and tell us what role they would like us to do."
His comments come a few days after Vodafone India CEO Martin Pieters said his company saw itself as a "natural consolidator" in the domestic sector, noted ET.
The Indian government is announcing new merger and acquisition rules in October, which is expected to further help consolidate the fragmented telecoms sector. It recently lifted a cap on foreign investments, allowing local telcos to be 100 percent foreign investments.
Israel added foreign investors would like to see a more stable rupee, which has been recently depreciating. "We have been here for 12 years... If you are going to pump in billions of dollars in a country, you don't want to suddenly wake up one fine day and realise your investment has reduced," he said in the article.