SINGAPORE: Singapore Telecommunications Ltd. agreed to pay S$2.47 billion ($1.8 billion) for stakes in Thailand’s Intouch Holdings Pcl and India’s Bharti Telecom Ltd. to broaden access to fast-growing wireless markets in Asia and Africa.
Singtel will pay 60.83 baht per share for a 21 percent holding in Intouch and 235.62 rupees a share for 7.39 percent of Bharti Telecom in cash to Temasek Holdings Pte, Singapore’s state-owned investment firm, the carrier said in a statement Thursday. The transaction will be funded through short-term debt and a S$1.605 billion placement of shares to Temasek, according to the announcement.
The deal deepens Singtel’s footholds in Thailand and India, where the shift in users to smartphones is driving up demand for data services. Intouch is the biggest shareholder in Advanced Info Service Pcl, Thailand’s largest wireless carrier, while Bharti is the largest stake owner of Bharti Airtel Ltd., India’s No. 1 mobile phone operator.
“The deal makes sense,” Nicholas Teo, a strategist at KGI Fraser Securities said by phone. “Their growing footprint in Asia makes them an attractive regional mobile player. This brings economies of scale that allows them to offer better pricing for customers roaming around the region.”
The transaction won’t result in a big shift in control of the market because Singtel is buying the stakes from its majority owner, Temasek, while raising the money to pay for it mostly from the owner. The placement of new shares with Temasek will raise its stake in Singtel to about 52.27 percent from about 51 percent.
Advanced Info and Bharti Airtel Ltd., the wireless affiliate, have operations in 18 countries across South Asia and Africa and a combined customer base of 380 million, Singtel said in the statement. The Singaporean carrier began investing in those businesses in 1999, it said.
“We have confidence in the long-term performance of India and Thailand,” Chua Sock Koong, Singtel chief executive officer, said at a media briefing in Singapore.
