Idea to buy another cell firm in 2004

Close on the heels of acquiring Escotel in a deal valued at about Rs 1,150 crore (Rs 11.50 billion), Tata-Birla-AT&T-promoted Idea Cellular expects to conclude another acquisition of a regional player in 2004.

"We are talking to various regional cellular players, especially first and the second licencees and some negotiations are in advanced stages," Vikram Mehmi, CEO of Idea Cellular, told reporters on sidelines of a conference to announce pilot launch of EDGE technology services.

Mehmi said that feelers were coming from various players in circles of Rajasthan and Maharashtra amongst others.

He clearly mentioned that Idea was aggressively eyeing acquisition strategy for expanding its footprint across India, to become the country's topmost cellular company.

On its proposed entry into the capital market through a public offering, Mehmi said, "We are evaluating the proposal and the final decision is expected in two weeks."

"Although we are yet to take a decision on IPO, the company is prepared to go to the market and we are in position to issue a prospectus in two weeks," Mehmi said, adding that bankers or lead managers were not yet appointed for the purpose and the work is being done internally.

He declined to comment on reports of an equity rejig involving the promoters Tata, Birla and AT&T.

Mehmi, however, denied that any of the three owners had desired to exit the venture at this point.

Elaborating on Idea's expansion plans, Mehmi said, "We are being approached by bankers of regional operators. Feelers are coming from many companies." He, however, did not identify them.

He said that Idea's capital expenditure for the next three years would be about Rs 1,700 crore (Rs 17 billion), which would be funded out of internal resources and debt.

"Therefore, if we decide on an IPO, the proceeds would go towards acquisition and other market expansion activities," he said.

He said that Idea hoped to garner revenues of Rs 1,300 crore to Rs 1,400 crore (Rs 13-14 billion) during the year ended March 2004, with another Rs 350 crore (Rs 3.5 billion) coming from Escotel.

Idea, which is a three way equal joint venture between Tata, Birla and AT&T, currently has a subscriber base of three million in the country and has presence in 11 circles.