The Hindu Business Line : Telecom Malaysia open to merge Spice with Idea

New Delhi May 31 Telecom Malaysia Bhd, which has 49 per cent stake in Spice Communications, said that it would be open to the possibility of merging its Indian venture with Idea Cellular Ltd to get a larger share of the world's fastest-growing cellular phone market.

Idea Cellular and Spice Communications may be in talks with each other for a possible merger of their operations to create the country's fifth largest mobile entity. While Spice has operations in two circles, Idea Cellular has services in 11 circles.

Both companies are looking to expand their network to become a pan-India operator. Both the companies have applied for additional licences to expand their footprint to compete with the likes of Bharti Airtel, Reliance Communication and Vodafone.

While Spice has 2.8 million subscribers in Karnataka and Punjab, Idea Cellular has 14.5 million subscribers in Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Delhi, Kerala, Haryana, Uttar Pradesh (east) and (west), Rajasthan and Himachal Pradesh.

Spice could get about 12 per cent stake in the merged entity, according to market sources.

Earlier, Spice Communication had said that it had received regulatory clearances from the Securities and Exchange Board of India to go for an initial public offering. The company plans to offload 137.9 million shares or 20 per cent stake.

The holdings of Modi Group and TM, post-listing, will reduce to 40.8 per cent and 39.3 per cent, respectively.

When asked about the possibility of a merger with Idea, company officials said that they did not want to comment on speculation.

More Stories on : Mergers & Acquisitions | Telecommunications

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