Bahrain Telecommunications, popularly known as Batelco announced entry into the lucrative Indian market by acquiring 49 percent stake in Indian mobile services new entrant S-Tel, a name probably which many within the industry may not even remember to be existing.

Batelco said that the transaction will be done in partnership with Millennium Private Equity (MPE), a Dubai Financial Services Authority (DFSA) regulated entity and the two will together form Batelco Millennium India Company (BMICL) to purchase shares in S-Tel. While the deal is expected to be completed by end of Q1 2009, it is subject to all the preconditions and other regulatory compliance as mandated by the rule of the land.

S-Tel currently has start-up GSM spectrum in Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, North East and Assam.  These circles collectively account for a population of 230 million and mobile penetration of less than 20 percent. The current deal has valued the firm at more than $ 500 million.

"Our priority now is to assist S Tel to rapidly roll out network infrastructure and offer mobile services to customers," said Batelco Chief Executive Peter Kaliaropoulos.

S-Tel becomes the third new entrant to have attracted foreign investment. Earlier Unitech and Swan too found strategic foreign partners n the form of Telenor and Etisalat respectively. Till now there had been absolutely no clarity on any major progress of S-Tel on the rollout of services. There is no information available on appointment of any senior personnel as well.

Loop Telecom and Datacom remain the other new entrants who are yet to seek foreign partnership. Loop is reported to be involved in a deal with a Mauritius firm. But for Datacom, the ongoing management dispute is turning out to be a bottleneck.