AT&T is reportedly looking to invest in Indian telecom operator Reliance Jio Infocomm, according to the Times of India. The report noted AT&T was set to purchase a 25% stake in the soon-to-launch operator for approximately $3.5 billion.
Domestic analysts were not surprised by the rumor, citing comments by AT&T management that the company expects emerging markets to provide a greater return on investments compared with domestic or more developed markets. However, there was a question as to whether the Indian market was the best way to achieve a return.
“If this story is true, it is a little unclear to us why [AT&T] would be interested in India given the fragmented nature of this market and somewhat different spectrum policies,” noted Wells Fargo Securities senior analyst Jennifer Fritzsche.
India’s Supreme Court early last year cancelled 122 2G spectrum licenses controversially handed out by former Telecom Minister A Raja in 2008.
AT&T domestic rival Verizon Communications is reportedly in talks with European-based operator Vodafone Group about possible acquiring Vodafone’s minority stake in domestic wireless operator Verizon Wireless for up to $115 billion. The move would consolidate Verizon’s control over its wireless operations that have led the industry in cash-flow generation over the past several years.
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