AT&T to Buy Maxis’s 74% Stake in Aircel
AT&T Eyes Maxis’s 74% Stake In Indian Telco Aircel: Report
It may be better to be late than never for American telco AT&T. After exiting India in 2004 by selling of its stake in Idea Cellular (then called Birla AT&T), the telecommunications giant is reportedly looking at re-entering the India’s fast growing mobile telephony market via a stake acquisition. AT&T is in talks with Malaysia’s Maxis for buying out the latter’s 74 per cent stake in Aircel, The Economic Times reported. The Indian telco has operations in nine circles and has received spectrum for 14 more circles, and by the end of the year, it will be a pan India operator. It has a strong presence in Chennai, Tamil Nadu, Assam and North East circles.
The report also said, quoting unnamed sources, that AT&T had approached new licence holders like Videocon’s Datacom, Unitech, BPL Mobile subsidiary Loop Telecom, and other players who have started getting allocated spectrum. So this time AT&T is serious about its re-entry plans.
AT&T wants to do a Vodafone in India. The UK telco was another global giant which re-entered India by acquiring Hutchison’s stake in Hutch Essar by paying through its nose (at an enterprise valuation of $18.8 billion). Vodafone had earlier held stakes in Indian telco RPG Cellular, which it exited in 2003-04. It then entered India again by acquiring a 10 per cent economic interest in Bharti Airtel. Since a majority stake in Bharti was not coming its way, Vodafone jumped at the opportunity when Hutchison was looking to exit India.
If Maxis is looking at a quick exit from India, then AT&T may get a chance to acquire a large telco with pan Indian ambitions. In December 2005, Maxis acquired a 65 per cent stake in Aircel from Chennai industrialist C Sivasankaran at an enterprise value of $1.08 billion. Maxis’s total stake in Aircel will be 74 per cent after totalling its holding in its joint venture with Apollo group.
Source: VCCIRCLE
