Such a move could create a strong No. 3 telco behind the proposed Vodafone-Idea combine and Bharti Airtel, amid intense competition triggered by Reliance Jio Infocomm’s entry.
Anil Ambani, chairman of the Reliance Group, is believed to have approached N Chandrasekaran, the newly anointed Tata Sons chairman to discuss the matter, said people aware of the development.
“Nothing has been finalised yet,” one of them said, noting that there are some obstacles such as Tata Tele’s debt of about Rs 30,000 crore. The legal issue regarding NTT Docomo’s exit from Tata Tele also needs to be resolved, the person said.
Tata Tele, Tata Sons and RCom did not respond to emails sent by ET. State Bank of India, a key lender to RCom, Aircel and Tata Teleservices, is said to have long been pushing for consolidation.
Tata Tele’s debt will be a big factor in any talks with the RCom-Aircel combine, which has debt of a similar amount, experts said. Tata Sons is looking to clean up the telco’s books. ET reported last week that the Tata holding company plans to infuse Rs 10,000 crore to clean up the telecom unit’s balance sheet.
Tata Tele has also taken approval to double its authorised capital to Rs 40,000 crore, indicating further equity infusion, experts said.
However, Tata Group executives said the company already has a board resolution for a sale of the business or a gradual shutdown of operations. In the event of a merger, the Tata Group is unlikely to take any equity, they added.
The fragmented but intensely competitive telecom market, currently led by Bharti Airtel, is on the brink of major consolidation as the intense price war triggered by Reliance Jio has left most telcos bleeding.
