Malaysia's Maxis, India's Apollo Founder To Buy Aircel"

KUALA LUMPUR -(Dow Jones)- Maxis Communications and founders of an Indian hospital company have agreed to buy Indian mobile-phone operator Aircel Ltd. for US$1.08 billion, the companies said Friday.

In its latest move to build a regional presence, Malaysia's No. 1 mobile phone company by subscribers said it will purchase 65% of Aircel Ltd., a regional operator with 2.2 million subscribers.

A joint venture with the Reddy family, who are the founders and key shareholders in India's Apollo Hospitals Enterprise Ltd., will own the rest of Aircel.

A press release from the companies didn't reveal the specific investment by Maxis and the Reddy family.

Aircel, owned by Aircel Televentures, is India's sixth-largest GSM-based mobile-phone operator, and is the largest in Tamil Nadu. It has also recently started operations in northeastern India and the eastern states of West Bengal, Assam and Orissa.

The acquisition is Maxis' biggest-ever overseas investment and substantially larger than the $100 million it spent for a 51% stake in Indonesia's PT Natrindo Telepon Seluler this year, its maiden overseas foray.

"They've been saying for the past few quarters that they've been looking to move overseas, as growth has been slowing down in the domestic market," said Izhar Allaudin, an analyst with Avenue Securities.

Maxis is following a well-trodden path to seek growth in emerging markets as competition intensifies in the home market. State-owned Telekom Malaysia Bhd. (4863.KU) and neighboring Singapore Telecommunications Ltd. (T48.SG) have bought mobile-phone companies in emerging markets such as India and Indonesia and are seeking other investments in South Asia.

India has just 72 million mobile-phone subscribers, but is adding some 3.5 million new users each year, becoming an attractive market for regional players. Meanwhile, some 17 million of 25 million Malaysians already own a mobile phone, a level that many consider near-saturation. Maxis has seven million subscribers and 40% of the local market.

-By E-Ling Liaw, Dow Jones Newswires; 603 2692 5254; e-ling.liaw@dowjones.com

-Edited by Hasan Jafri and Leslie Shaffer

(END) Dow Jones Newswires "

Posted to the site on 30th December 2005