Indian real estate developer Unitech is in talks with Norwegian telecom group Telenor to sell a stake in its nascent telecoms venture, two financial market sources and an industry source said on Monday.

Earlier in the day, India's telecom minister Andimuthu Raja said he was told Unitech had almost finalised a foreign partner and had entered into a term sheet with the firm.

Telenor said last month it was open to possible entry into India's growing mobile market, as part of its Asia-focused investment strategy.

Telenor already operates in Pakistan and Bangladesh and says it is the second biggest non-Asian operator in Asia after Vodafone.

"The deal has been on for sometime and it's almost been wrapped up. Barring last minute hitches, we should see it through," said one financial market source, who is not directly involved in the deal but is close to the developments.

The industry source, with direct knowledge of the deal, confirmed that Unitech was in talks with Telenor but also said separate discussions were on with another European telecoms firm.
"You will see an announcement in the next 10 days, whoever it is," he said.

The industry source said Unitech was looking to sell a stake of more than 40 percent in the venture to be branded Unitech Wireless, which has licences to operate in India's 22 service areas and plans to launch services by March 2009.

But he declined to be specific on valuations.
Another financial market source, also not directly involved in the deal but aware of the developments, said Unitech was looking to raise $1.5 billion to $2 billion from the stake.

Last month, another Indian telecoms start-up, Swan Telecom, which has licences to operate in 13 service areas, sold a 45 percent stake to Emirates Telecommunications Corp for $900 million, giving Swan a $2 billion valuation.

Unitech, with 22 licences, should be valued at a much higher price, the industry source said.
Unitech is India's second-largest listed real estate firm. Earlier this year it got the licences through its subsidiaries and has been awarded radio spectrum in 12 of them so far.

Foreign players have been interested in picking up stakes in Indian telecom firms to cash in on the 8-9 million mobile subscriber additions every month that make the country the world's fastest-growing market for wireless services and the second-largest such market after China.

Source:Reuters