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Vivendi Eyeing Stake In Datacom?

The severely neglected telco Datacom, which has licenses for 21 telecom circles but has not rolled out yet, may have a savior yet. French media and telecom conglomerate Vivendi SA might be its knight (or should we say chevalier) in shining armor. Vivendi may be buying a large stake (various media report it as being anywhere between 40-51%) in Videocon Group owned Datacom, according to Economic Times.

Vivendi is not the first foreign telco to be interested in Datacom, which has been in talks earlier with six others: France Telecom (Orange Telecom), Qatar Tele, Kuwait’s Zain, Turkish telecom major Turkcell and Mexican tycoon Carlos Slim’s America Movil. It was in talks with Dubai-based Etisalat, but Etisalat chose Swan Telecom (now Etisalat DB Telecom India), a telco that sprung up much the same time as Datacom did. Etisalat now wants to increase its stake to gain majority share. Bahrain Telecommunications Company (Batelco) was also in talks with Datacom but has since invested in S-Tel, another new telco. S Tel recently saw investment bank GB Corp pick up 11 percent stake in it.

What Ails Datacom
Datacom owns licenses for 21 of India’s 22 telecom circles. Though it has been attractive to investors interested in India’s burgeoning mobile market, internal disputes between the company’s co-owners – the Nahatas and the Dhoot family – turned many off and the company has suffered neglect for three years now. The Dhoots run consumer electronics company Videocon while Nahatas own HFCL. Read the timeline of disputes between the stakeholders.

Nothing is known about the company’s status of operations or when it will officially roll out. Considering that larger telcos are already talking about consolidation as the only way through this phase of hyper competition with 13 telecom operators in most circles, and that 3G is yet to arrive, Datacom could use the experience and know-how of telecom that Vivendi has. Vivendi’s other telecom investments are Maroc Telecom Group in Morocco and Africa and Brazilian telco GVT which it acquired in November.

Datacom recently signed a $400 million tower sharing deal with Aircel for 5000 towers.


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