Idea Cellular and Spice Telecom might call off their proposed merger talks. The two companies were unable to come to terms on the valuation, and also on the future structure of the management to run the merged entity.
According to a source close to the development, Spice Telecom will go ahead with its planned initial public offering (IPO).
“The deal seems to be off, at least for the moment. Valuation is believed to be key issue, while differences in sorting out of management and operational issues of the joint company also played a part,” the source told Business Standard today.
Spice Telecom, which has received approval from the Securities and Exchange Board of India, would go ahead with its Rs 600 crore IPO.
The combined entity would have had a market share of over 11 per cent in the mobile space. However, even after the merger, the company would remain the fifth largest mobile operator in the country-far behind Bharti, Hutch, BSNL, Reliance and Tata Teleservices.
Read more in The Business Standard article.
Showing posts with label Idea Cellular. Show all posts
Showing posts with label Idea Cellular. Show all posts
Friday, June 8, 2007
Wednesday, May 30, 2007
Spice awaits IPO before deciding on merger with Idea
It is learnt that Spice Telecom may be in talks for a possible merger with Idea Cellular. Spice Telecom has revenues of Rs 1000 crore and has been valued between Rs 4500-5000 crore.
Spice Tele has 2.8 million shareholders and operates in two circles - Punjab and Karnataka.
At this point of time, it might make sense for Idea to make the move, as it is a nine-circle operator and might want to expand its India footprint. Also, getting new spectrum might take longer. So, the move makes perfect sense and is the fastest way for Idea to expand.
BK Modi, Chairman of Spice Tele said that at this point they were not in merger talks, but confirmed that there was a proposal for a merger with Idea. Currently, they were concentrating on their IPO, after which merger talks might resume. Meanwhile, Sanjeev Aga, Managing Director, Idea Cellular said that he had "no comment" to make.
Spice Tele's IPO was to float in June-July this year.
Spice Tele has 2.8 million shareholders and operates in two circles - Punjab and Karnataka.
At this point of time, it might make sense for Idea to make the move, as it is a nine-circle operator and might want to expand its India footprint. Also, getting new spectrum might take longer. So, the move makes perfect sense and is the fastest way for Idea to expand.
BK Modi, Chairman of Spice Tele said that at this point they were not in merger talks, but confirmed that there was a proposal for a merger with Idea. Currently, they were concentrating on their IPO, after which merger talks might resume. Meanwhile, Sanjeev Aga, Managing Director, Idea Cellular said that he had "no comment" to make.
Spice Tele's IPO was to float in June-July this year.
Monday, May 28, 2007
Spicy deal: Spice, Idea now talk merger
A major consolidation in the telecom sector could be on the cards. Discussions have just begun between Spice Telecom and Idea Cellular for a possible merger, whose outcome can go either way.
According to top sources, the option of both Spice buying out Idea Cellular as well as the Birlas-owned Idea Cellular buying out Spice are being considered. However, with talks being in the preliminary stages, a source said it would take anywhere between 8 and 12 months before anything could be finalised.
Adding a new dimension, sources told ET that Telekom Malaysia, which holds 49% in Spice Telecom (the BK Modi group holds 51%) is keen to expand its footprint in India and make some acquisitions to expand Spice’s operations. This is because Spice, at present, is limited to just two telecom circles, Punjab and Karnataka.
Last year, Telekom Malaysia had acquired 49% in Spice for $179 million (Rs 733 crore). In June 2005, Telekom Malaysia and Singapore Technologies Telemedia had opted out of the agreement for acquiring a 47.7% stake in Idea Cellular for about $390 million as the government did not clear the deal.
Read more in The Economic Times article.
According to top sources, the option of both Spice buying out Idea Cellular as well as the Birlas-owned Idea Cellular buying out Spice are being considered. However, with talks being in the preliminary stages, a source said it would take anywhere between 8 and 12 months before anything could be finalised.
Adding a new dimension, sources told ET that Telekom Malaysia, which holds 49% in Spice Telecom (the BK Modi group holds 51%) is keen to expand its footprint in India and make some acquisitions to expand Spice’s operations. This is because Spice, at present, is limited to just two telecom circles, Punjab and Karnataka.
Last year, Telekom Malaysia had acquired 49% in Spice for $179 million (Rs 733 crore). In June 2005, Telekom Malaysia and Singapore Technologies Telemedia had opted out of the agreement for acquiring a 47.7% stake in Idea Cellular for about $390 million as the government did not clear the deal.
Read more in The Economic Times article.
Thursday, May 17, 2007
M-cap inches close to $1 trn
The market capitalisation of India is inching towards $1 trillion after the total value of all listed stocks touched an all-time high of Rs 39,78,172 crore or about $970.28 billion (at Rs 41 a dollar) on Wednesday. The economy touched the $1 trillion mark just recently.
The journey towards the $1-trillion mark is nothing less than spectacular, considering that the market cap was just about $150 billion in 2004. To put in context, the total bank deposits in 2004 was $500 billion and has crawled to about $650-700 billion in the same period.
A total of 33 new scrips, including Idea Cellular (Rs 30,372 crore), Power Finance Corp (Rs 15,602 crore), Indian Bank (Rs 5,406.51 crore), Firstsource Solutions (Rs 3,913.32 crore), MindTree Consulting (Rs 2,973.38 crore), Fortis Healthcare (Rs 2217.97 crore), Global Broadcast News (Rs 1,855.46 crore), Redington India (Rs 1,378.69 crore) and ICRA (Rs 926.05 crore) added as much as Rs 70,710 crore to the market cap. One of the prominent gainers in the m-cap journey is Reliance Capital, whose m-cap crossed the $ 5 billion-mark on Wednesday.
Read more in The Business Standard article.
The journey towards the $1-trillion mark is nothing less than spectacular, considering that the market cap was just about $150 billion in 2004. To put in context, the total bank deposits in 2004 was $500 billion and has crawled to about $650-700 billion in the same period.
A total of 33 new scrips, including Idea Cellular (Rs 30,372 crore), Power Finance Corp (Rs 15,602 crore), Indian Bank (Rs 5,406.51 crore), Firstsource Solutions (Rs 3,913.32 crore), MindTree Consulting (Rs 2,973.38 crore), Fortis Healthcare (Rs 2217.97 crore), Global Broadcast News (Rs 1,855.46 crore), Redington India (Rs 1,378.69 crore) and ICRA (Rs 926.05 crore) added as much as Rs 70,710 crore to the market cap. One of the prominent gainers in the m-cap journey is Reliance Capital, whose m-cap crossed the $ 5 billion-mark on Wednesday.
Read more in The Business Standard article.
Thursday, April 12, 2007
Three firms in race for RComm's $1.5 bn deal
Telephony major Reliance Communications is believed to have short-listed three global IT companies – IBM, EDS and T-Systems – for its $1.5 billion outsourcing contract.
A high-level internal committee of the Anil Ambani group company is expected to finalise one of the vendors for the 10-year deal in 6-8 weeks, sources close to the development said today. A RComm spokesperson refused to divulge the names of the short-listed vendors. He, however, admitted that the company was in talks with leading IT services vendors, which include large global players.
US IT major IBM has a strong presence in India and had recently announced its intention of focusing on IT outsourcing contracts from the country. If finalised, this would be the second major contract for the company as the Big Blue had earlier bagged a $800-million outsourcing contract from GSM major Idea Cellular.
Texas-based Electronics Data Systems, popularly known as EDS, is a market leader in the US and Europe and has been providing IT services and support for the last 40 years. T-Systems, the subsidiary of German telecom major Deutsche Telekom, is also one of the major players in the IT sector with expertise in managing IT requirements for telecom companies.
Earlier, RComm’s Internal Committee had decided to outsource its information technology requirements for 10 years to a technology service provider. The company was planning to outsource its wireless, enterprise and international business, under a $1.5 billion deal that was considered as one of the biggest in the Indian telecom outsourcing sector.
The move is expected to reduce the company’s projected IT spends “significantly” and also enable it to remain asset light. Industry analysts opined that the company would save 20 per cent by outsourcing and would also enable it to concentrate on its core competencies.
RComm had earlier earmarked a capital expenditure of $2.5 billion for this financial year that would be spread across its three business segments – personal, enterprise and international.
RComm’s mobile business has a subscriber base of close to 30 million, growing by over a million subscribers every month for the last 10 months. The company also has a 50 per cent plus market share in the enterprise market with around 1,000 top corporates in its client list.
A high-level internal committee of the Anil Ambani group company is expected to finalise one of the vendors for the 10-year deal in 6-8 weeks, sources close to the development said today. A RComm spokesperson refused to divulge the names of the short-listed vendors. He, however, admitted that the company was in talks with leading IT services vendors, which include large global players.
US IT major IBM has a strong presence in India and had recently announced its intention of focusing on IT outsourcing contracts from the country. If finalised, this would be the second major contract for the company as the Big Blue had earlier bagged a $800-million outsourcing contract from GSM major Idea Cellular.
Texas-based Electronics Data Systems, popularly known as EDS, is a market leader in the US and Europe and has been providing IT services and support for the last 40 years. T-Systems, the subsidiary of German telecom major Deutsche Telekom, is also one of the major players in the IT sector with expertise in managing IT requirements for telecom companies.
Earlier, RComm’s Internal Committee had decided to outsource its information technology requirements for 10 years to a technology service provider. The company was planning to outsource its wireless, enterprise and international business, under a $1.5 billion deal that was considered as one of the biggest in the Indian telecom outsourcing sector.
The move is expected to reduce the company’s projected IT spends “significantly” and also enable it to remain asset light. Industry analysts opined that the company would save 20 per cent by outsourcing and would also enable it to concentrate on its core competencies.
RComm had earlier earmarked a capital expenditure of $2.5 billion for this financial year that would be spread across its three business segments – personal, enterprise and international.
RComm’s mobile business has a subscriber base of close to 30 million, growing by over a million subscribers every month for the last 10 months. The company also has a 50 per cent plus market share in the enterprise market with around 1,000 top corporates in its client list.
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