Aircel plans buying out RPG Cellular

NEW DELHI: India's Aircel Ltd, a mid-sized mobile services provider, is in talks with RPG Cellular Ltd to buy out its mobile business in the southern city of Chennai, an industry source told Reuters.

Aircel Ltd, the second-largest cellular services provider in the southern state of Tamil Nadu, already owns a 20.76 percent stake in RPG Cellular which it bought from British cellphone giant Vodafone Group Plc in June for an undisclosed sum.

The source gave no details and RPG Cellular officials declined comment.

The proposed buyout comes after the government brought fixed-line and cellular services under a single licence, which analysts say, hurts the prospects of many mid-sized cellular companies facing mounting losses.

A single licence regime is likely to hasten consolidation in the sector that has one of the lowest call charges in the world.

Aircel had a cellular user base of 309,690 customers in Tamil Nadu at the end of September and RPG Cellular had 193,312 users, data from an industry body showed.

Overall, India has more than 24 million mobile users that are expected to cross at least 100 million by 2008, making the country one of the fastest growing mobile markets globally.

© Reuters