How SingTel Came Close To Investing In Reliance’s Telecom Venture Before Picking Stake In Airtel

Singapore Telecom ( Singtel), now the largest foreign investor in Bharti Airtel, was keen on doing a deal with Reliance Industries before deciding to pick stake in Sunil Mittal’s venture.

In a new book titled ‘Telecom Man’, authored by B K Syngal, former Chairman, Videsh Sanchar Nigam Ltd, and co-authored by Sandipan Deb, the authors detail out the sequence of events which led Singtel to move from Reliance to Airtel.

Syngal, who worked with Reliance in the late 1990s, has written in the book that Singtel was very keen to invest in India and was excited about Reliance’s new telecom venture. “I had known the Singtel people for a long time in my previous avatar at VSNL. Lim Lim Toon was the company’s chief operating officer. He contacted me and said that Singtel would like to be part of Reliance’s grand plans and was willing to invest around $600 million,” Syngal said.

Singtel was not particular about the equity stake they would own but wanted half the investment to be pumped into a dedicated undersea cable between Chennai and Singapore. Reliance was then planning to launch a countrywide mobile network using CDMA technology.

“Mukesh formed a small team comprising me, Ajeet Verma and others and we were tasked to study the proposal, prepare a term sheet and so on. Lim Toon would fly in for discussions and finally, everything was ready, except for one detail, which was the amount of equity that Singtel would hold – a stake up to 10 per cent,” Syngal said in the book published by Westland Publications.

Syngal was asked to go to Singapore and meet Lim Toon to finalise the deal. Manoj Modi, the closest aide, and friend of Mukesh Ambani was supposed to go for this meeting but backed out.

“We had meetings with Lim Toon and various teams and thrashed out the last bits. The only gap that remained was the equity part. Singtel kept asking us about it, but we had no answer. That was Manoj Modi’s domain, “Syngal said.

Without Modi’s consent, the deal could not go through. Meanwhile, Sunil Mittal came to know of the talks collapsing and approached Singtel. In 2001, SingTel along with Warburg Pincus, AIF, IFC, NYLIF and Seejay Cellular made equity investments of approximately $481.30million.

―The Hindu Business Line