Idea on the takeover trail again

Feelers from firms in Maharashtra, Rajasthan

Idea Cellular is in advanced negotiations with cellular companies in Rajasthan and Maharashtra for yet another acquisition.

A three-way joint venture between the Birlas, the Tatas and AT&T, the company had only last month sealed a Rs 1,150 crore deal to buy Escotel, which operates in Kerala, Haryana and Uttar Pradesh.

While BSNL, Essar Hutchison and Hexacom operate in Rajasthan, the players in Maharashtra are BPL Mobile, Bharti Cellular and BSNL.

TCIL and Canada-based TIW, which hold 30 per cent and 27 per cent, respectively, in Hexacom, have been scouting for a buyer. Bharti had earlier pitched for acquiring TIW's stake.

Vikram Mehmi, chief executive officer, Idea Cellular, said, "We are aggressively pursuing acquisitions to expand our footprint. We are talking to various regional cellular players, especially the first and the second licensees. We have got feelers from the bankers of regional players in Rajasthan and Maharashtra. The negotiations are in advanced stages."

Idea Cellular is present in 11 circles, including Delhi, Gujarat, Andhra Pradesh, Maharashtra, Haryana, Kerala, Madhya Pradesh and Uttar Pradesh. It recorded a turnover of Rs 951 crore in 2002-03 and has a subscriber base of 3 million.

Mehmi told reporters on the sidelines of a press conference to announce Idea's EDGE strategy that a decision on the company's initial public offer was expected in two weeks. The proceeds would be used for acquisition and other market expansion activities.

On reports of equity restructuring, Mehmi said none of the three owners had plans to exit "at this point".

He said Idea's capital expenditure for the next three years would be about Rs 1,700 crore, which would be funded through internal resources and debt.

Idea is targeting a revenue of Rs 1,300-1,400 crore for the year ending March 2004, with Escotel chipping in another Rs 350 crore.

Idea today announced the launch of EDGE-based services in association with Nokia, which would allow its subscribers with specific handsets to undertake mobile web browsing and video streaming.