The private equity group, Providence Equity Partners has taken a twenty percent stake in Aditya Birla Telecom (ABTL) - a wholly-owned subsidiary of India's Idea Cellular - for US$640 million. ABTL owns the telecom mobile license for the Bihar service area and will hold a 16 per cent stake in Indus Towers, the company's tower subsidiary which is co-owned by Vodafone Essar and Bharti Airtel.
Sanjeev Aga, Managing Director of Idea, commented, "This commitment will bolster our position as a leading telecom player in India. We share a relationship of trust with Providence which has facilitated putting through a large transaction in next to no time."
Added Biswajit Subramanian, Managing Director of Providence Equity Advisors India, "We are pleased with our successful partnership with Idea and look forward to extending that relationship to this important investment in the future of IndiaĆ's mobile communications sector. The Idea management team is proven and respected, and we look forward to supporting their success at ABTL."
The Bihar service area, covering the states of Bihar and Jharkand, has the second highest population among all service areas of India, but with the lowest mobile penetration. The company has already received spectrum, and is in an advanced stage of readiness to roll out mobile services under the Idea brand in the next few months.
Indus Towers is a joint venture company formed by Vodafone Essar, Bharti Airtel and Idea Cellular to provide passive infrastructure services to various mobile operators in 16 telecom service areas.
It is anticipated that ABTL will eventually be listed on the local stock exchange. Providence has previously invested US$400 million in Idea Cellular back in 2006 - so the total investment now tops the US$1 billion mark.
Idea Cellular has licenses to operate in all 22 service areas of India with commercial operations in 11 service areas. With a customer base of over 25 million, Idea Cellular runs operations in Delhi, Himachal Pradesh, Rajasthan, Haryana, Uttar Pradesh (East), Uttar Pradesh (West) & Uttaranchal, Madhya Pradesh & Chattisgarh, Gujarat, Maharashtra & Goa, Andhra Pradesh and Kerala, holds spectrum for Mumbai, Bihar, Orissa & Tamilnadu (including Chennai), and licenses for the remaining eight service areas.
With the planned launch of services in Mumbai, Bihar and Jharkhand in Q3, and Orissa and Tamilnadu (including Chennai) towards the end of the calendar year, IdeaĆ's footprint will soon cover approximately 77 per cent of Indian telephony potential. Idea is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India.
Posted to the site on 22nd May 2008
Posted to: www.cellular-news.com/story/31326.php