New Delhi: Telecom services provider Spice Communications Ltd is open to all offers, including stake sale, and is currently waiting for a proposal from Telekom Malaysia (TM) before it takes a decision, its chairman B.K. Modi said on Tuesday.
TM holds 39.2% in the Indian telecom services provider. Spice, which currently has operations in two of the 23 telecom circles, needs funds to expand.
“We have got four new licences and are hoping to get more. We have to expand the company’s capital and total investment,” Modi told reporters on the sidelines of annual shareholders meet.
Modi said although firms like UAE’s Emirates Telecommunications (Etisalat) have been in talks with Spice, he was waiting for an offer from TM as Indian laws permit a maximum of 74% foreign holding in telecom firms.
“As TM has already 39%, any restructuring on the foreign side has to be done with TM. So it is TM who has to finally decide and then they will propose to us,” Modi said.
Spice is open to TM raising its stake to 74% or bringing in new partners.
“As and when they (TM) will be ready, I will talk to them... Once they have found a solution, I will not take more than 48 hours,” Modi said.
He, however, said he will not like any offer below Rs60 a share. “That was the price at which the share was quoted just after the initial public offering... I have committed to shareholders not to make a deal below 60,” Modi said.
Asked if he was ready to part away with the company, he said, “Today in a dynamic world you cannot be emotional. We are a mature business and are open to all offers.”
Shares of the company closed 2.3% down at Rs57.25 in a weak Mumbai market.
With the markets in the US and European countries saturating, global telecommunication firms are looking at emerging markets such as India for increasing revenue. India, one of the fastest growing mobile phone market, has some 261 million cellphone users, more than in the US.
Increasing revenue from India and Turkey had helped Vodafone Group Plc., the world’s top mobile operator, to report a full-year profit last month. The UK-based company had entered the two emerging markets in the last two years through acquisitions.
It had purchased a 52% stake in Hutchison Essar Ltd, now India’s third largest wireless operator, for $10.7 billion in May 2007. In 2006, it had bought Turkey’s Telsim Mobil Telekomunikasyon Hizmetleri AS for $4.55 billion.
US-based AT&T Inc. is also reported to be keen on entering India. The company had exited from India in 2005 when it sold its stake in Idea Cellular. SingTel, South-East Asia’s top phone firm, owns more than 30% in India’s market leader Bharti Airtel Ltd.
Etisalat too has been looking to make inroads in the Indian market.
A Mint staff writer contributed to this story.