Tata Teleservices may sell spectrum to pay DoCoMo
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India’s Tata Teleservices is reportedly considering pursuing a sale of part of its spectrum holdings to help raise funds for the compelled buyout of NTT DoCoMo’s stake in the operator.
The company is looking into selling some of its 800-MHz and 1,800-MHz spectrum, and is sending feelers to rival operators that may be interested in the sale.
Operators including Vodafone and Telenor had previously expressed an interest in acquiring part of Tata Teleservices’ spectrum, but the discussions at the time stalled due to a lack of clarity around spectrum trading regulations.
But the operator’s efforts to sell its spectrum may well be complicated by the fact that most of its 1,800-MHz spectrum had been allocated under the earlier regulatory regime and is not eligible for trading.
Indian spectrum trading rules also require operators to pay a substantial fee to liberalize the spectrum to be sold, which would reduce the potential proceeds.
Tata Teleservices needs to raise money to fulfil its obligation to buy out NTT DoCoMo’s minority stake for $1.17 billion.
DoCoMo announced in 2014 that it plans to exercise its option to compel Tata Group’s majority shareholders Tata Sons to buy out this stake for at least 50% of the acquired price, but the transaction has not yet taken place.
Questions & Answers
Q.Which specific parts of its spectrum is Tata Teleservices reportedly looking to sell?
Which specific parts of its spectrum is Tata Teleservices reportedly looking to sell?
The company is looking into selling some of its 800-MHz and 1,800-MHz spectrum. It is reportedly sending feelers to rival operators that may be interested in the sale.
Q.What is making it difficult for Tata Teleservices to sell its spectrum holdings?
What is making it difficult for Tata Teleservices to sell its spectrum holdings?
Most of its 1,800-MHz spectrum is not eligible for trading as it was allocated under an earlier regulatory regime. Indian spectrum trading rules also require substantial fees to liberalise spectrum for sale.
Q.Why does Tata Teleservices need to raise $1.17 billion?
Why does Tata Teleservices need to raise $1.17 billion?
Tata Teleservices needs to raise this money to fulfil its obligation to buy out NTT DoCoMo’s minority stake. DoCoMo announced in 2014 its plan to compel Tata Group’s majority shareholders to buy out the stake.
Q.Which other operators had previously shown interest in acquiring Tata Teleservices' spectrum?
Which other operators had previously shown interest in acquiring Tata Teleservices' spectrum?
Operators including Vodafone and Telenor had previously expressed an interest in acquiring part of Tata Teleservices’ spectrum. However, discussions stalled due to a lack of clarity around spectrum trading regulations at the time.
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