What an Idea! Spice it up!

With the acquisition of Spice Communications Limited (Spice), Idea Cellular will have a subscriber base of 4.5 million, which will consolidate its position as one of the largest players in the Indian telecom sweepstakes. 

How did this come about? It all started with an Idea!

Idea Cellular, an Aditya Birla Group company, along with Telecom Malaysia International (TMI) announced the acquisition of 40.8 per cent stake in Spice Communications Limited (Spice) at a price of Rs. 77.30 per share. TMI is an emerging leader in Asian telecommunications with over 44 million subscribers and a presence in 10 countries. The operational synergies emerging out of this merger would augur well for both the telecom players.

The acquisition of Spice gives Idea the much needed headway in Punjab and Karnataka — states that account for more than 10 per cent of India’s wireless subscribers. “It will give us incumbent advantage in both these circles,” said Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group. “We are now in the big league of telecom players in the county,” added Mr. Birla. 

The entire process of the merger between both the companies would take six to eight months to complete. Post merger, Idea is looking at a pan-India presence. The deal also gives Idea the opportunity to leverage TMI's strong presence in 10 principal Asian markets, including neighbouring countries like Sri Lanka and Bangladesh where TMI is a market-leader.

Said Mr. Kumar Mangalam Birla, “Post merger, Idea will be among the top three players in eight circles. I would say this is a strong inflection point for Idea.”

Idea Cellular, the leading GSM mobile services operator has licenses to operate in all 22 service areas of India with commercial operations in 11 service areas. With a customer base of over 26 million, it runs operations in Delhi, Himachal Pradesh, Rajasthan, Haryana, Uttar Pradesh (East), Uttar Pradesh (West) & Uttaranchal, Madhya Pradesh & Chattisgarh, Gujarat, Maharashtra & Goa, Andhra Pradesh, and Kerala, holds spectrum for Mumbai, Bihar, Orissa, Tamil Nadu (including Chennai), and Karnataka, and licenses for the remaining six service areas.

With the planned launch of services in Mumbai, Bihar and Jharkhand, Orissa and Tamil Nadu (including Chennai) towards the end of the calendar year, Idea's footprint will soon cover approximately 90 per cent of India's telephony potential.

Needless to say, yellow is the colour of the season! With new circle launches in the next four months, Idea is all poised for rapid growth. Says, Mr. Sanjeev Aga, managing director, Idea Cellular Limited, "The strategic import of this move travels beyond Punjab and Karnataka. By the end of the year the Idea yellow will increasingly colour the Indian landscape."

The idea is of course a good one, as for all good ideas you need an IDEA!