The Hindu Business Line : Singapore, Malaysian firms to buy AT&T's stake in Idea Cell

SINGAPORE Technologies Telemedia (STT) and Telekom Malaysia are together acquiring AT&T Wireless's 33.3 per cent stake in Idea Cellular, the equal joint venture between AT&T and the Tata and AV Birla groups.

"A broad agreement has been arrived at for the sale. The formalities will be worked out over the next few weeks," said an official with Idea Cellular who refused to reveal the size of the transaction.

But a Reuters report, quoting an industry source, said that the buyout will cost more than $220 million (around Rs 1,000 crore), "making it the largest acquisition so far in India's consolidating wireless industry".

Sources close to the deal said that STT and Telekom Malaysia have asked for a larger stake in the GSM cellular concern - up to 49 per cent, the maximum permissible foreign holding for companies in the telecom sector.

"But anything concerning this will be discussed by the board of directors of Idea Cellular only after the AT&T Wireless stake has been sold," said the Idea official.

If this happens, the stakes of the Tata and AV Birla groups, currently at 33.3 per cent each, would stand reduced to around 25.5 per cent each, assuming they offload shares equally.

Idea officials were keen to scotch long-time rumours that the AV Birla group has been trying to sell its interest in the company.

"Both the Tatas and the Birlas are keen to retain stake in the company."

Idea Cellular is the fifth largest wireless access provider in the country. After its recent acquisition of Escotel, it has 3.8 million subscribers in 11 telecom circles of the country.

The acquisition will release more funds for Idea's expansion, both through organic growth as well as through buyouts, said the sources.

A history of multiple parentage lies behind Idea Cellular.

When Bell Canada pulled out of its joint venture with the Tata group, saying that its interests lay elsewhere, the Tata's cellular concern then united with the joint venture of Birla AT&T.

Commonly referred to as Batata, this company then announced a merger with BPL Communications, in what was supposed to constitute the largest merger in the Indian telecom industry.

The merger talks fell apart and in the meantime, the concern too decided to rename itself Idea Cellular, which spared it branding problems arising from changing parentage.

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