Idea Cellular plans buyout, expansion

NEW DELHI: Idea Cellular Ltd, India's fourth biggest GSM-mobile phone services provider, said that it was planning to spend $376 million on network expansion and expected to announce at least one more buyout this year.

Pune-based Idea Cellular recently acquired mid-sized rival Escotel Mobile for $66 million and the combined user base of both companies is more than three million customers in the 30-million strong wireless market, one of the fastest growing globally.

"I expect at least one more deal to happen in this calendar year," Vikram Mehmi, chief executive officer at Idea Cellular Ltd told reporters. "We are being approached by a number of bankers from regional operators."

Idea Cellular, equally owned by powerful Indian business groups Birla and Tata and U.S.-based AT&T Wireless Services Inc, has a mobile footprint covering 11 of the 23 circles making up the flourishing domestic telecoms market.

"In the next three years we will spend around 17 billion rupees ($376 million) on capacity expansion," Mehmi said.

Leading Indian carriers are expanding their networks rapidly in the underpenetrated industry where less than three in a 100 people own a mobile phone compared with more than 20 in China, the world's largest market for mobile services.

Idea, an IPO candidate, competes with Bharti Tele-Ventures Ltd, 28 percent owned by Singapore Telecommunications Ltd, Reliance Infocomm Ltd and state-run Bharat Sanchar Nigam Ltd for a larger share of the expanding mobile pie.

© Reuters