BOMBAY (AFX) - SBC Communications will buy a stake of up to 8 pct in telecom software maker Mahindra-British Telecom (MBT), Calcutta-based newspaper The Telegraph reported.

The deal will also allow SBC Communications to take a seat on MBT's board, the report said.

MBT is a joint venture between Mahindra and Mahindra and UK's BT Group PLC.

The company was quoted as saying that it had entered into an agreement with SBC in May this year that 'establishes criteria for potential future options for SBC to invest in MBT.'

'SBC has the option to obtain up to 8 per cent of MBT's equity over a five-year period in pre-defined increments, provided it meets the criteria outlined in the agreement,' MBT was quoted as saying in response to an email from The Telegrah.