Batelco is selling it's 42.7% holding in S Tel to it's partner Sky City Foundation for $175Mn. The sale is expected to be completed by the fourth quarter of this year.

The company had acquired the 42.7% equity in STel via two transactions in May and June 2009 for a total of $174.5Mn.

S Tel Private Limited incorporated on June 19, 2007, is a JV between the Siva Group and Batelco Millenium India Company Ltd., a subsidiary of Bahrain Telecommunications Company. S Tel obtained Unified Access Services Licences to operate in the six Category 'C' circles of Orissa, Bihar, Himachal Pradesh, North-East, Assam and J&K in January 2008.

It commenced operations in December 2009 in three circles namely Orissa, Bihar and HP, and has rolled out its services in the five circles of Orissa, Bihar, Himachal Pradesh (HP), North-East and Assam with a total subscriber base of 3 million as on April 30, 2011.

S Tel also has a 'Category A' All India ISP license. The company has signed an end-to-end telecom infrastructure agreement for telecom towers, transmission for BTS sites and fibre backbone for inter-city connectivity with major telecom infrastructure providers namely, Bharati Infratel, Reliance Infratel, Viom, Vodafone and Aircel.

This transaction comes after Supreme cancelled all the 122 2G licenses that were issued during the tenure of ex Telecom Minister A Raja after January 2008. The cancelled licenses include three of Tata Teleservices, 21 of Videocon, 22 of Uninor, 9 of Idea Cellular, 6 of Stel, 13 of Etisalat DB, 21 of Loop, and 21 of MTS.

Uninor, the other telecom operator whose 2G license has been cancelled has asked for support from the GoI to help it steer through the crisis. Telenor is a majority shareholder in Uninor, a JV partner with Unitech. The Norwegian government in turn holds the majority stake in Telenor.

UAE operator Etisalat owns a 45% stake in India affiliate Etisalat DB which also lost its licence last week. Etisalat has said it would study the court judgement, but declined to say on whether it would now seek to exit the country.

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