Real estate company Unitech is planning to merge all its eight telecom subsidiaries to consolidate and better manage the telecom business.

Each subsidiary typically has licences for three to four circles and together, they cover all 22 telecom circles in the country.

“We do not intend to form a holding company for our telecom venture, but will instead merge all telecom subsidiaries,” Unitech MD Sanjay Chandra said, adding that the merger was likely only after the services are launched. Unitech plans to roll out telecom services by the middle of 2009. It has already been allotted spectrum for 16 circles.

The company struck a deal with Norway-based telco Telenor two months ago to offload 60% stake in its telecom venture for Rs 6,120 crore.

As per this deal, Telenor was to get 60% stake in each of the eight telecom subsidiaries, but a merger will mean Telenor will hold 60% stake in the entity formed after the consolidation of business.

The stake sale has got delayed as Telenor has not raised funds for the transaction till now and Unitech is yet to comply with two key conditions as per its agreement with the Norwegian telco. The first tranche of fund, slated to come in by December, may now probably be received only in January.

The deal is contingent on the completion of tower-sharing agreements between Unitech and other service providers and conversion of all eight subsidiaries into private limited companies.

“Five have already been converted, while three will turn into private limited companies soon,” Mr Chandra said adding that the agreement with other service providers for tower sharing is also close to completion.

In order to keep its capital expenditure low, Unitech had decided not to erect any of its own towers but share the existing infrastructure. Unitech is expected to a pay an average rental of around Rs 25,000 per tower.