Aditya Birla group's Idea Cellular has signed a deal to acquire 40.8 per cent stake in Spice Communications for Rs 2,716 crore (Rs 27.16 billion).
Even if the company's merger issue was sorted out, it would have a lot of ground to cover in order to attract subscribers.
Denying any breach of merger and acquisition (M&A) norms, Aditya Birla group firm Idea Cellular on Tuesday said the company's merger with Spice Communications was approved by court and consummated with the full knowledge of the Department of Telecom.
The court asked Idea to transfer all the licences of Spice back to DoT.
In a big setback to Aditya Birla Group firm Idea Cellular, the Delhi High Court said the six licences of Spice Communications would not be transferred to Idea, since the company did not comply with the licence and merger guidelines. The court also slapped a fine of Rs 1 crore for hiding information.
Idea Cellular's bid to acquire a controlling stake in the B K Modi-promoted Spice Communications has hit a pricing roadblock. Investment banking sources said that B K Modi had asked for Rs 70 a share for his 40.8 per cent stake in Spice, valuing the company at Rs 4,829.47 crore, but Idea is reluctant to pay that much."Any price valuing Spice Communications beyond Rs 4,200 crore would be expensive for Idea Cellular," said an analyst with a domestic brokerage.
Idea Cellular, the fifth largest mobile operator in the country with around 15 million subscribers, is believed to be on the verge of clinching a cash-cum-equity buyout of Spice Telecom that values the latter at around $1 billion.
Birla group firm Idea Cellular Ltd and Modis-owned Spice Telecom on Friday dared the government to allocate spectrum to those mobile operators who submitted applications after them.
Aditya Birla group firm Idea Cellular on Monday made an open offer to the shareholders of Spice Communications for acquiring additional 20 per cent stake in the telecom services provider for about Rs 1,066.63 crore (Rs 10.66 billion).
The department of telecommunications has raised questions about the merger between Idea Cellular and Spice Telecom violating key clauses on intra-circle merger and mobile licence conditions.
The Aditya Birla group's wireless telephony firm Idea Cellular has agreed to buy Spice Communications in a three-stage deal in which minority shareholders of Spice would be given an option either to swap their shares for the Birla group firm or sell them in an open offer.
Telekom Malaysia which already holds over 49 per cent equity stake (which it bought for over Rs 730 crore in Spice has been looking at expanding its base in India beyond just the two circles.
Idea Cellular, the Aditya Birla group firm that is on the verge of taking over Spice Communications by buying out B K Modi's 41 per cent stake, is sounding out its bankers to raise funds to upgrade in the struggling telecom operator's network and technology.
A team of Telekom Malaysia officials will meet US-based billionaire B K Modi and officials of Idea Cellular in Mumbai on Friday, a top official at Spice Communications said. Another option is to permit Telekom Malaysia raise its stake in Spice Communications to 74 per cent. Even though, Idea Cellular will have no role to play in this deal, the Modi family will sell around 14 per cent stake and retain a 26 per cent stake.
A choppy beginning followed by flashes of good work. Strong pedigree, yet lagging behind peers. That could be actor Abhishek Bachchan or the mobile phone service he endorses, Idea Cellular. The analogy goes further. Just like Amitabh decided to step in and shore up his son's career, Idea's parent, AV Birla Group, has taken the cellular services provider by the scruff in a bid to make it one of the top three in the business.
BK Modi-promoted Spice Group and British Virgin Mobile have bid for MTNL's franchise deals to offer 3G services in Mumbai and Delhi.
Telecom to Telekom Malaysia in an attempt to complete the merger, sources involved in the negotiations said, declining to be identified. The group has hired Enam Financial as adviser to the transaction. Investment banking sources said the lawyers from both the parties are now busy structuring the deal so that the acquisition meets all the regulatory norms of the country and the Birlas retain control over Idea Cellular.
Telecom regulator Trai has initiated action against cellular operators including Bharti, Idea and Hutchison for defying its order on selective blocking of calls originating and terminating in some basic service operators' networks.
This merger, Bhupesh Bhandari believes, will be watched keenly by management gurus the world over.
MobileFirst, an alliance formed by the second rung cellular operators in India, is mulling a slash in mobile-to-mobile STD airtime rates, in line with an announcement made by Idea Cellular on Saturday.
Bhupendra Kumar Modi of Spice Corp on Thursday sent an expression of interest to the new Satyam Computer Services board to acquire the fraud-hit company.
The Department of Telecom has worked out a one-time spectrum charge of over Rs 2,060 crore to be levied from operators for the period they remained in business after their licences were cancelled in February last year, sources said.
TRAI said the two companies failed to fulfill roll-out obligations and their merger was in violation of rules.
Going by application dates, companies like Spice, Birla-promoted Idea Cellular, Reliance Communications (through Swan and Cheetah) and Hindustan Futuristic are in the lead for licences in different circles. The only new player in the list is the little-known ByCell.Several incumbents like Idea Cellular, Maxis-Aircell, owned by a Malaysian promoter, and Vodafone-Essar lead the list of applicants for initial spectrum allocation since they already hold licences.
The deal is expected to be struck at $150 million (about Rs 600 crore). If the deal goes through, it will mark the entry of Indian companies in Hollywood studios.
While UltraTech Cement has been the biggest value creator adding nearly Rs 99,000 crore to its market capitalisation, Grasim Industries has added around Rs 27,000 crore to its market cap.
The Supreme Court in February, 2012 had quashed 122 2G licences.
Dissing rivals is not going to cut much ice with today's millennials who don't think what is "free" is any worse than what is paid for, says Ambi Parameswaran.
In the summer, we tend to eat less and drink more. Avoid large portions of food, as they will be difficult to digest and may cause you to feel tired and lazy. Instead, have frequent and small portions of meals, which will keep them fresh and light, suggests Dr Shoaib Sangatti, emergency physician, Ruby Hall clinic, Wanowire.
Taking the government head on, four GSM mobile operators -- Bharti Airtel, Vodafone, Idea and Spice -- have decided to "unitedly" approach the Delhi High Court against telecom tribunal TDSAT's interim order not to stay the spectrum allocation process.
Investors will remain cautious ahead of F&O expiry.
Investors engaged in profit booking in the recent gainers at attractive and higher valuations.
The 30-share Sensex ended up 8 points at 27,508 and the 50-share Nifty closed 1 point higher at 8,284.
Markets will be closed on Thursday and Friday on account of Holi and Good Friday, respectively.
Telecom stocks fell after Mukesh Ambani extended Reliance Jio's free offers till March 2017.
A liberalised spectrum allows operators to use any technology to deliver services like 3G and 4G.
BlackBerry has got everything in place to help its latest launch become a favourite with consumers, says Himanshu Juneja
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances