Aircel Ltd, a unit of Malaysia's Maxis Communications Bhd, will invest about $500 million in the next three years to expand coverage in India.
Maxis chief executive officer Datuk Jamaludin Ibrahim, who also sits on the Aircel board, said the investment covers to some extent Aircel's two current areas, namely Tamil Nadu and Chennai.
"But a bulk of the investment is predominantly for the 10 new circles, five of which have been launched while the other five will be launched by the year-end," he was quoted as saying by the daily New Straits Times on Thursday.
Jamaludin said the significant investments are necessary to make Aircel a pan-India player. He said out of the $500 million to be raised by Aircel, $300 million is already in place as extended by 11 Indian banks.
Jamaludin was speaking to reporters after Maxis' extraordinary general meeting in Kuala Lumpur on Wednesday to seek shareholders' approval of its $1.08 billion acquisition of Aircel. The proposed acquisition now awaits approvals from the Malaysian and Indian regulators, the report said.
Upon completion, Maxis will hold a controlling 74 per cent equity interest in Aircel, as a result of its 65 per cent direct stake and 9 per cent indirect stake via its participation in a joint-venture company Deccan Digital Networks Private Ltd.
In total, Maxis will directly invest $702 million for its equity interest while Deccan will invest the remaining $378 million.
Aircel is currently the number one mobile operator in Tamil Nadu and Chennai. New circles were launched recently in West Bengal, Orissa, Assam, North-East, and Jammu and Kashmir.
Aircel expects to roll out mobile services in five other circles, namely Bihar, Himachal Pradesh, Madhya Pradesh, Uttar Pradesh east and Uttar Pradesh west.
When services are available in all the circles, Aircel will be serving 58 per cent of India's total population, Jamaludin was quoted as saying.
On whether Maxis is interested in another Indian mobile phone operator Spice Telecom Ltd, Jamaludin said, "We have been talking to many parties, not just for equity reasons but also alliances in areas such as infrastructure sharing and product development."
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group
