UPDATE 1-India's Tata Tele sells tower unit stake to Quippo
(Adds details, quotes)
NEW DELHI, Jan 5 (Reuters) - India's Tata Teleservices has agreed to sell a 49 percent stake in its telecoms tower arm to another Indian tower firm, valuing the business at an enterprise value of 130 billion rupees ($2.7 billion).
In a bid to cut costs, Indian mobile operators are increasingly sharing base stations and tying up with independent operators as they expand across vast rural districts and penetrate smaller towns, where low income subscribers dominate.
In November, NTT DoCoMo (9437.T) agreed to buy a 26 percent in the unlisted Tata Teleservices.
Quippo Telecom Infrastructure Ltd, an unlisted firm in which India's SREI Infrastructure (SREI.BO) and the Government of Singapore Investment Corp (GIC) own stakes, will pay Tata Tele 24 billion rupees and transfer 5,000 towers to the merged entity.
"This deal assumes a big significance for us ... and coming at a time when all new operators will need passive infrastructure," Anil Sardana, managing director of sixth-ranked mobile operator Tata Teleservices, said on Monday.
"3G and broadband wireless access auctions are round the corner. That will give a lot of opportunity," he said.
The merged tower company, Wireless-TT Info-Services, which will be managed by Quippo, will have 18,000 towers in total and ramp that up to 50,000 by 2010/11.
India last year gave licences to at least five new telecoms firms, which are likely to start services in 2009 in an increasingly competitive market where call rates are already among the world's cheapest.
The government is scheduled to auction spectrum for third-and fourth-generation wireless services at the end of January.
Tata Teleservices had 31 million subscribers at the end of November on the less popular CDMA platform.
Rivals Bharti Airtel (BRTI.BO), Vodafone Essar (VOD.L) and Idea Cellular (IDEA.BO) have formed a joint venture tower firm, which now owns about 80,000 towers, India's largest such company.
Shares in Tata Tele's listed unit, Tata Teleservices (Maharashtra) closed 2.7 percent up on Monday, while SREI shares jumped about 20 percent in a Mumbai market that gained 3.2 percent.
Citigroup and Nomura advised Tata Teleservices, while Quippo was advised by JM Financial (JMSH.BO).
GSM SPENDING
Tata Tele is looking to spend $2 billion to enter the dominant GSM sector, and Sardana said it would announce the launch of GSM services shortly.
The company has received GSM radio spectrum in 13 of India's 22 telecom service areas and hopes to get airwaves in most of the remaining areas by the end of this month, he said.
As part of NTT DoCoMo deal, the Japanese firm and Tata Sons, the parent of Tata Tele, will make an open offer for up to 20 percent of listed unit Tata Teleservices (Maharashtra).
The offer was slated to open on Jan. 8, but has been delayed as India's stock regulator is yet to give its approval.
Tata Group firms own about 80 percent of Tata Teleservices. Temasek [TEM.UL] has about 9 percent and investor C. Sivasankaran holds 8 percent. Sardana said they would "stay put". ($1=48.6 rupees) (Editing by Mark Williams)
