Thomas K. Thomas
New Delhi, Feb. 7
MALAYSIAN telecom major Maxis Communications Berhad has planned fresh investment of $1 billion in the Indian market following its acquisition of Tamil Nadu-based cellular services company Aircel Ltd.
This is in addition to $1.08 billion investment the Malaysian company has kept aside to take a 74 per cent stake in Aircel through a joint venture with the Apollo Group.
"Maxis expects to invest over $1billion in India in the coming three to five years. It has great confidence in the potential of both the Indian economy and the Indian telecommunication market, " the company said in a letter to the Communications Ministry.
Maxis has said that the company plans to extend Aircel's operations across the country to give it a pan-India footprint. The company has applied for new unified services licences in Mumbai, Karnataka, Rajasthan and Maharashtra. Aircel has also requested to convert its letter of intent into a licence in Madhya Pradesh and Uttar Pradesh circles. The company has also applied for new licences for Kolkata, Punjab, Haryana and Kerala. Of the billion dollar fresh investment being planned by Maxis, $100 million will be spent on ramping up Aircel's existing second generation network.
Another $500-$700 million is being planned to build brand new EDGE enabled cellular network in Assam, North-East and Orissa.
The company also said that it would make substantial investments for rolling our third generation services and wireless technologies like WiMax for broadband and fixed line telephone users.
On December 30, 2005, Maxis and Apollo Group had announced 100 per cent acquisition of Tamil Nadu-based Aircel.
The transaction will proceed in two steps. The first step where Maxis acquired 26 per cent stake in Aircel with an investment of $280 million has been complete.
In the second step, Maxis will purchase another 49 per cent directly while the joint venture company with Apollo will acquire the remaining 35 per cent for a total sum of $800 million.
Effectively, Maxis will have an interest of 74 per cent in the company while the balance will be with the Apollo Group.
This transaction is expected to be completed by next month subject to necessary approvals.