Tata Tele, Hughes merger imminent

CIOL Bureau
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AHMEDABAD: Hughes Network Systems and Tata Teleservices(TTL) are in their

final stages for a possible merger with its local fixed line unit Hughes

TTL managing director, S Ramakrishnan stated this while launching the basic
telephone services by the last quarter of the current year in Gujarat followed

by Delhi, Karnataka and Tamil Nadu where it will invest not less than Rs 1200


With TTL not interested in IPO in the near future, the company officials say a
strategic partnership would be the ideal platform. "From the current Rs 150

crore revenue, the upcoming telecom company expects to double its revenues with

a target of 6 million subscribers in as many years," said Ramakrishnan.

The group also plans to start WLL services in major cities of Gujarat, said,
chief operating officer of Gujarat circle, Jagrut Vyas.

But for such an ambitious target, TTL will also need huge funding. Ramakrishnan
said that the Tata group will bring in about Rs 1400 crore through equity and

some Rs 300 crore by lending from IDBI or through AP circle. The other option

that TTL has under its sleeve is the merger whereby the infrastructure and

subscriber base will automatically transfer.

TTL had signed a MoU with Hughes in April regarding the negotiation of merger
latest by June end after an initial negotiation pact was called off in January

in the wake of unsatisfactory valuations. But, in case of a merger, the analysts

say, both the companies will benefit.