AT&T has become the latest international operator linked with an investment in India’s Reliance Communications (R-Com), reports the Wall Street Journal. According to sources, the two parties “have sounded out each other’s interest” about a potential transaction in which AT&T would take a significant minority stake in the Indian operator. R-Com said on Sunday its board has approved the sale of up to a 26 percent equity stake in the firm to raise cash for debt reduction and network upgrades. Both Abu Dhabi-based Etisalat and South Africa’s MTN have also been linked with buying a similar-sized stake in R-Com, though MTN denied it was talks late last week. The 26 percent stake is valued at around INR18,000 crore (US$3.8 billion). R-Com is currently controlled by businessman Anil Ambani (67.58 percent) and, until recently, he was barred from divesting any of this stake by his brother, Mukesk, who controls other parts of the Reliance group. However, with the two brothers recently scrapping a non-compete agreement, R-Com nows appears poised to receive outside investment.

As part of its interest in international expansion, AT&T has held informal discussions in the past year with telecom operators in several countries, including R-Com, the people familiar with the matter say. AT&T is thought to prefer a deal that would see it take a controlling (rather than minority) stake in the Indian firm, though sources say that Anil Ambani is reluctant to reduce his personal stake. However, the report notes that AT&T – which had previously been put-off by high stock market valuations in India – may still go for a deal as R-Com shares have dropped by about 50 percent in the past 12 months. A deal with R-Com would mean a return to the Indian market for AT&T, which in 2005 sold its 33 percent stake in Idea Cellular, a rival Indian mobile operator. AT&T has been looking at ways to get back into the country ever since Randall Stephenson took over as chief executive, the report says.