Distacom exits from Spice Telecom

BANGALORE: Spice Telecom today announced a revamp in the financial structure of its company.

Hong Kong-based Distacom, which held 42 percent stake in the company, has sold its stake. Making this announcement at a press briefing in Bangalore, BK Modi, chairman, Spice Communications Private Ltd, said that the company would re-launch its brand and strive to provide information, communication and entertainment services to customers.

He also announced the exit of Sean Dexter who served as managing irector, and the appointment of Navin Kaul as the new MD. With the exit of Distacom, Modi said, that Spice would up its stake in the company from the existing 22 percent to 36 percent. “We would like to increase this stake further to 51 percent and be the majority holder.” To do this, Modi hopes to buy 15 percent stake from the Darby, in the next six-eight months.

Ashmore Investment management, which is part of Deutsche Bank, and a still-to-be-identified strategic investor would share the rest of the 49 percent stake in the company.

Spice plans to invest $120 million in India over the next two-three years. Part of this funding is expected to come from Modi group's holding company-Mcorp, which has $45 million credit guarantee revolving fund.

The company's new restructuring plan involves branding, increasing the network reach in the two focus states of Punjab and Karnataka; provide value added services and promotions. Modi admitted that the company had slipped in terms of market share in Karnataka. “But this will change. We are now the number five player in Karnataka. We hope to become number two in Karnataka.” The company has 330,000 subscribers in Karnataka and around 1.2 million subscribers in Punjab.

The company has roped in Priyanka Chopra to endorse the Spice brand. Modi said that the company would get aggressive in marketing, provide innovative services, roll-outs of technologies like GPRS and CRBT and networks.

Spice hopes to add 300 towers in Karnataka in the next three-six months. Kaul said that the company was looking to increase its operating licenses in four more states including Himachal Pradesh, Jammu & Kashmir, Haryana and Rajasthan.

Modi was confident that the new developments would bode well for the company. “We want to disprove the myth that regional players like us cannot survive in the Indian telecom market,” he said.