Tata Teleservices Limited’s (TTSL) shareholders have approved a proposal to raise Rs 10,000 crore by issuing convertible preference shares, reports ET. The proposal also includes increasing the company’s authorized capital to Rs 40,000 crore from the existing Rs 20,000 crore, added the report. MediaNama has written to TTSL for a confirmation and will update the story once they respond.

The proposal to raise funds via shares comes at a time when the Indian telecom industry is turning to be hyper-competitive with reports of consolidations. Bigger players like Airtel, Idea, and Vodafone lost a considerable amount of data subscribers to Reliance Jio’s free data and calls offer. This has subsequently led to a price war, with rival operators lowering down data rates and providing freebies of their own. In order to keep up with Jio, which has 4G spectrum in all 22 circles, rival telcos are looking to acquire their competitors to fill up their spectrum holdings and asset base. Last month Airtel was reportedly in talks to acquire Telenor for $350 million, while Idea is currently in discussions for an all-share merger with the Vodafone Group.

Investment by other operators

Similar to TTSL, other telcos have also announced plans to raise funds, mainly to expand 4G services:
-Idea has issued six corporate bonds in the past two months, taking the total to over 5,000 crore.
-Reliance Jio said in the same month that it will is investing Rs 30,000 crore for expanding its 4G coverage and network capacity.
– In September last year, Vodafone’s parent unit in the UK announced that it would invest Rs 47,700 crore via FDI route.

Trouble with NTT Docomo stake

TTSL jointly owns the Tata Docomo telecom company in India through a partnership with Japan’s NTT Docomo which holds a 26% stake in the joint venture. After the venture started posting continuous losses, TTSL was ordered to pay $1.17 billion in damages to NTT by a London court in June.  NTT told in statements to the press that Tata is not ‘honoring’ the payment of $1.17 billion in damages, while Tata denied these allegations citing RBI’s foreign exchange regulations prevented it from paying the entire amount in a single transaction. Tata also deposited the entire amount with the Delhi Court registrar. The court’s verdict is still pending in this case. More on this here.