Foreign telcos eyeing Shyam Telelink stake

Posted on | January 31, 2006 |

ET reports that Korea Telecom is the front-runner for snapping up a majority stake in Shyam Telelink which operates fixed-line and CDMA-based mobile services in Rajasthan under the Rainbow brand. Korea Telecom is one of the largest global players in the fixed-line broadband space. US-based Sprint, Deutsche Telekom and Sweden-based Telia are also said to be in the reckoning.

Shyam has a subscriber base of 2,30,000. Of this, 1,95,000 are voice and the rest are data customers. Among voice customers, only 35,000 are mobile, and the rest are fixed-line subscribers. The company plans to increase its subscriber base to 3,50,000. It recently signed a contract worth Rs 200 crore with ZTE for buying and installing equipment for 5,00,000 lines.

Shyam was the first GSM mobile service-provider to roll out services in Rajasthan. In April ‘04, it sold its stake in Hexacom to Bharti. Hexacom was the largest cellular operator in Rajasthan with a subscriber base of 2,65,000. It was valued at $565 per subscriber. Its enterprise value was about Rs 1,000 crore. Bharti Hexacom now has more than 1 million subscribers. But this valuation can

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