AT&T puts its 33% Idea stake on the block
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AT&T puts its 33% Idea stake on the block

By SiliconIndia   |   Thursday, 26 February 2004, 08:00 Hrs
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NEW DELHI: With Cingular buying out AT&T Wireless, its stake in Idea Cellular is finally on the block. The US telecom major is in talks with international private equity investors to offload its stake in the three-way joint venture as the new buyer Cingular has shown no interest in Indian operations, reports Economic Times.

AT&T has already pulled out of its other investments in India , with the most recent being the exit from BPL Mobile.

Owning about a third of the venture, AT&T’s, share in Idea is in excess of Rs 750 crore and analysts estimate the deal could fetch them a higher price. AT&T was already believed to be looking at exiting the joint venture, but Cingular’s entry has accelerated the process. If the deal works out, it is also believed to pave the way for Idea’s long-awaited IPO to fund acquisitions.

AT&T’s investment in Idea Cellular is one of its most important international joint ventures — the others are in Canada , the Czech Republic and the Slovak Republic — and comes at a time when the company has been mulling an IPO. In the largest all-cash deal, the second-largest US mobile phone group, Cingular (owned by regional carriers SBC Communications and BellSouth) recently took over it rival AT&T Wireless.

AT&T Wireless split from its parent company AT&T in July ’01 to become a full-fledged wireless major.

This was AT&T’s last remaining investment in India , with the US major having recently exited BPL Cellular. And AT&T is not alone. Many global telecom bigwigs have recently diluted their holding in Indian telecom companies. While TIW is getting out of Hexacom in Rajasthan, Vodafone has recently exited out of RPG Cellular.

While Idea’s total revenue is close to Rs 1,300-1,400 crore, Escotel that it recently acquired has a revenue in the range of Rs 350 crore. After acquiring Escotel, which provides services in Kerala, Haryana and Uttar Pradesh (West), Idea is planning expansion through more acquisitions and to issue shares to the public so as to raise funds to finance these buyouts. The company completed its financial closure in October ’03. Idea is an operator in Maharashtra , Gujarat , Andhra Pradesh, Madhya Pradesh and Delhi .




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