S’pore firm to buy AT&T’s Idea stake

Rahul Gupta

MUMBAI: Singapore based ST Telemedia (STT) is all set to buy the 33 percent stake of American telecom giant, AT&T Wireless Services’ in Idea cellular, whose other share holders include India’s leading business conglomerates-Tatas and Birlas. STT has recently tied up with TM International, a wholly owned subsidiary of Telekom Malaysia to foray into the Indian cellular market space.

Sources on the condition of anonymity revealed that both the foreign companies are currently analyzing the prospects of venturing into the Indian market. STT and TM International tie-up is valid for a year and depending on the criticality of business, it might be extended for some more time.

Meanwhile, in a note to foreign media, STT spokesman Melinda Tan is reported to have stated that the company will join TM International "to pursue a strategic stake in India's Idea Cellular". She also said, "India has one of the fastest growing mobile sectors in the world. Its low mobile penetration and vast telecommunications market potentials present an attractive investment opportunity for ST Telemedia. Mobile penetration is a mere three per cent (in India), compared with more than 80 per cent here (Singapore)."

Sources in Idea confirmed that it is a foreign player who is taking stake in the company, denying all claims made by media that Bharti might pick up the stake in Idea Cellular. According to reports, six players had evinced interest in AT&T’s stake, which is valued at about $200 million (approximately Rs 900 crore). When contacted Idea’s VP Corporate Affairs, Rajat Mukherjee refused to comment on the news.

The cellular service provider operates in 11 circles in the country and has a subscriber base of four million. The equity capital of the company is valued at around Rs 2,700 crore in which AT&T and Birla has 33 percent holding while the Tatas hold 31.85 percent of the equity. The remaining equity of about 1.85- percent is held by US leading insurance and financial services firm, American International Group (AIG).

CyberMedia News