Bharti Airtel has emerged the frontrunner to acquire Loop Mobile, one of Mumbai's oldest cellular networks, as the company's owners, Dubaibased IP Khaitan and family, seek to exit the telecom sector, said multiple sources aware of the negotiations.
Discussions with Airtel have been going on for some time and have gathered momentum in recent weeks. But a final deal is dependent on clarity on guidelines governing mergers and acquisitions in the telecom sector and the renewal fee for Loop's licence, before discussions begin on the valuation and other commercial terms. Loop's licence expires in September 2014.
The guidelines for telecom sector M&As may impose a spectrum acquisition fee for non-market trades. "The minister has been hinting at plugging the loophole and asking telcos to pay a fee if they acquire spectrum from non-government sources, that is, via M&A. That will be a negative for any consolidation efforts," added another official on condition of anonymity.
Discussions with Airtel have been going on for some time and have gathered momentum in recent weeks. But a final deal is dependent on clarity on guidelines governing mergers and acquisitions in the telecom sector and the renewal fee for Loop's licence, before discussions begin on the valuation and other commercial terms. Loop's licence expires in September 2014.
The guidelines for telecom sector M&As may impose a spectrum acquisition fee for non-market trades. "The minister has been hinting at plugging the loophole and asking telcos to pay a fee if they acquire spectrum from non-government sources, that is, via M&A. That will be a negative for any consolidation efforts," added another official on condition of anonymity.