TTSL eyes merger with TTML; NTT eyes larger pie in TTSL?

Its consolidation time in the telecom sector and as every player gears up to remain competitive; Tata Teleservices (TTSL) joins the gang and this time around via a possible merger with Tata Teleservices Maharashtra (TTML), reports CNBC-TV18's Kritika Saxena.

CNBC-TV18 learns that TTSL is in exploratory talks to merger with TTML. "Since this is in exploratory stages it could mean two things. TTSL merges with TTML and lists on the stock exchanges or the other way around where TTML is delisted. The latter is highly unlikely;" said an executive familiar with the development who did not wish to be named. "The contours are still being worked out but basically the move will help TTSL consolidate its telecom portfolio and will help it enable easy access to raising capital;" he added.

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NTT to hike stake in TTSL?

In addition, sources say NTT Docomo, that holds 26.5 percent in TTSL is looking at hiking stake in the company. While the exact percentage of stake hike is not known, sources say that the company is looking at expanding its presence in India and is open to spending upto USD 1 billion in hiking its stake in India.

However, sources say the company will invest by hiking stake in tata teleservices. But if the merger does go through, the entire capital will be put into the joint entity post merger.

While the contours are still being worked out, experts say that if TTSL wants to remain competitive within the telecom space, it has to work on creating a larger entity and maybe even making way for a third investor