AT&T Eyeing Up Indian Mobile Operator Acquisition
AT&T is said to be considering a joint venture with India's Aircel - by purchasing the stake in the company held by Malaysia's Maxis. Aircel was valued at nearly US$1.5 billion in January 2006 when investor Sivasankaran had offloaded his entire stake to Maxis. At the time, the company had around 2.6 million subscribers, although this has now risen to around 6.2 million. The rapid growth in India's mobile market will push that valuation up significantly.
“AT&T has approached Maxis with an offer to buy its 74% holding in Aircel. The talks are at a preliminary stage right now,” sources told the Economic Times newspaper.
Maxis holds a controlling 74% equity interest in Aircel, as a result of its 65% direct stake and 9% indirect stake via its participation in Deccan Digital Networks Private Limited. Deccan Digital is the joint venture company Maxis has set up with the Chennai based Reddy family. The JVC will own a 35% direct stake in Aircel.
Aircel is present in 9 telecom circles (Assam, Bihar, Chennai, Himachal Pradesh, Jammu & Kashmir, North East, Orissa, Tamil Nadu and West Bengal) and with licences secured for the remaining 14 of the 23 telecom circles. AT&T already offers corporate landline services in India, and Aircel has also obtained the nod from Department of Telecommunications (DoT) to provide International Long Distance (ILD) and National Long Distance (NLD) telephony services - mirroring the services offered by AT&T.
AT&T declined to comment while Maxis said that it is committed to the growth of Aircel - which does not actually rule out a sale if such growth could be better delivered by a different owner.
On the web: Economic Times
Posted to the site on 23rd April 2008