Saudi Telecom has put India's GTL Infrastructure and Quippo on its shortlist for a stake in its tower business and final offers are likely to be made within the next few weeks, three sources said.
The sources, who are familiar with the matter, said Saudi Telecom's tower business was valued at between $1 billion and $1.5 billion.
The company had not yet decided if it would sell 49 percent or more in the unit but had made its shortlist for the stake, which included Indian firms GTL Infrastructure and Quippo, also a telecom infrastucture company, the sources said.
State-controlled Saudi Telecom has about 10,000 telecom tower -- which mobile operators used to transmit wireless signals -- said the sources, who declined to be named as they are not authorised to speak to the media.
A Saudi Telecom spokesman declined to comment.
When asked whether Quippo was bidding for a tower arm, Sunil Kanoria, a director on the board, said: "We are working on it."
He declined to comment on whether Quippo had been shortlisted.
A GTL Infra spokesman was also mum on Saudi Telecom.
"While we continue to pursue several opportunities for mergers and acquisitions, it would be premature at this stage to comment on any specific target," he said.
One of the sources said American Tower Corp, and a consortium of Dubai-based private equity firm Abraaj Capital and top mobile telecom-equipment maker Ericsson had also shown interest in the Saudi Telecom tower business, but it was not clear whether they were still in the race.
That source said Saudi Telecom has shortlisted between "one and three" serious contenders for the unit.
TOWER BUSINESS
In January, GTL Infra acquired 17,500 towers from India's mobile phone operator Aircel Ltd, a unit of Malaysia's Maxis Communications, at an enterprise value of $1.8 billion.
However, plans to merge the tower business of GTL Infra, founded by its chairman, Manoj Tirodkar, with India's No.2 mobile operator Reliance Communications (RLCM.BO) fell through last month.
Indian carriers have been hiving off their tower operations in order to reduce their capital expenditure and debt.
Analysts have said telecom companies typically spin off tower holdings into an independent firm, which makes it easier to attract rival carriers as tenants and boost earnings potential of the business.
The sources said Saudi Telecom wanted to sell a stake in the tower unit to cut costs as its market share at home was under pressure as a war heats up in the region with rivals Kuwait's Zain and Emirates Telecommunications.
Saudi Arabia has 47 million mobile phone users, 1-1/2 phones for each person, and could have 60 million by 2013, according to IT consultancy Delta Partners, which recently carried out a study on the market.