Idea Cellular is looking out for acquisitions to widen its cellular footprint and is holding talks with three members of the MobileFirst alliance -- RPG Cellular, Escotel Mobile and Spice Communications.
The three-way venture between the Tatas, Birlas and US telecom giant AT&T is in various stages of discussion with the promoters of the three firms for either buying out the entire company or acquiring interest in select circles, sources close to the development said.
If successful, Idea Cellular will be among the largest cellular operators in the country with over 3 million subscribers coming its way following the consolidation.
MobileFirst was incorporated early this year to leverage synergies and enhance value through roaming, long distance calling and other services.
It also helped members to share ideas and costs related to marketing. It is, however, still not clear whether the alliance will continue as the members are negotiating with Idea Cellular.
At present, Idea Cellular has over 1.5 million subscribers in the five circles - Maharashtra & Goa, Gujarat, Andhra Pradesh, Madhya Pradesh and Delhi - where it operates.
Sources close to Idea Cellular said: "We are in discussion with the promoters of Escotel, RPG Cellular and Spice, and are considering these proposals very seriously. This is part of our strategy to grow in the GSM market."
Executives at Escotel Mobile said, "The promoters are still discussing with Idea Cellular. Depending on the valuations and discussions, the course of final agreement will be decided."
Executives with RPG Cellular declined to specifically talk about any discussion with Idea. They said: "We have mandated KPMG to scout for buyers."
Umang Das, President, Industry and Strategy, Spice Telecom, said: "We are strongly placed in our respective circles (Punjab and Karnataka) and are running operations in view of the long-term business objectives.
Consolidation for any industry is, however, normal in today's competitive business environment. With regards to Spice, we are not in discussion for consolidation at the moment. Our primary objective is to constantly innovate our services and offer maximum value to our customers."
The three members of the MobileFirst alliances will provide a pan Indian footprint for Idea Cellular.
Escotel has presence in Harayana, Kerala, UP West, UP East, Rajasthan and Himachal Pradesh, RPG Cellular in Chennai, while Spice Telecom has a network in Punjab and Karnataka.
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