Maxis, Telekom in race for Spice Tele

Maxis Telecom Bhd and Telekom Malaysia Bhd today said they were in the race to acquire a stake in Indian GSM service provider Spice Telecom.

BK Modi's Spicecorp (India) holds 51 per cent in Spice Tele, while Deutsche Bank group and Ashmore Investment Management, a financial investor hold the remaining 49 per cent.

However, both the companies disclosed neither the stake they were interested in picking up nor the investment they were planning to make.

"Maxis' strategy for overseas expansion has been to explore opportunities in emerging markets with potential for growth and Maxis continues to have discussions with various parties. An appropriate announcement will be made in due course as and when definitive agreements are reached with any party in relation to any such opportunity," Maxis informed the Kuala Lumpur Stock Exchange (Bursa Malaysia) today.

Malaysia's largest cellular company was replying to a query by the exchange, which had quoted an article in a newspaper, TheEdge Malaysia.

It stated that "...Maxis Communications Bhd and Telekom Malaysia Bhd (TM) are said to be among those competing for it (Spice Telecom)."

Spice Telecom provides GSM services in Punjab and Karnataka. It has over 1.5 million subscribers. BK Modi had put the telecom operator on the block and had appointed KPMG as consulting firm for a probable stake sale. Indian rules permit a foreign player to hold up to 74 per cent in a cellular company in the country.

If the deal goes through, this would be the second deal by the company in India, as it had snapped up 74 per cent stake in Aircel Cellular in December 2005 for $1.08 billion. This was a joint deal with India's Apollo Hospital Enterprises.

Meanwhile, the state-controlled Telekom Malaysia Bhd (TM) also confirmed that it was in talks to buy a stake in Spice Telecom. According to a news report by Associated Press, TM's wholly owned unit TM International Sdn Bhd is "currently in preliminary discussions for a stake."

"This is consistent with TM's continued interest in India, which we see as complementing our other South Asian investments in Sri Lanka, Bangladesh and Pakistan," the company said in a brief statement.