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13.08.2013 Business & Finance

Vodafone to sell US$1bn Airtel stake

By Daily Graphic
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New rules say no carrier can hold a direct or indirect stake in a rival operating in the same service area.

The rules apply across the country's 22 licensing 'circles.'

Bharti and Vodafone, the country's number one and two operators, are present in every service area.

The new rules on cross shareholding were published on Friday.

Current rules allow cross ownership of up to 9.9 per cent, but operators must move across to the new rules when their existing licences expire. They then have one year to sell any stakes held in rivals.

Vodafone's licences in Delhi, Mumbai and Kolkata expire in the last quarter of 2014, points out Economic Times. Furthest away is the operator's licence for Madhya Pradesh which is not due to expire until 2027.

The Indian government proposed the idea of eliminating cross shareholdings among mobile operators to eliminate the possibility of cartel-like behaviour. It is concerned about operators acting in this way, for instance during a spectrum auction.

The fears were triggered after the failure of an auction in November 2012.

source: Graphic Business/MobileWorld

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