Mumbai: Spice Communications is open to Telekom Malaysia raising its stake to 74 per cent from the current 39.2 per cent. Spice is also open to the UAE-based Etisalat and others buying a stake in the company, chairman B K Mody said.
Telecom Malaysia partners Etisalat and NTT DoCoMo in some markets, Modi said, adding that "if they want to bring them in as part of the deal (for taking stake to 74 per cent), we are open to that."
Modi said Spice was in talks with Telecom Malaysia and the company was yet to receive any proposal from the latter.
Spice was willing to consider a stake sale, Modi said at a special shareholders meeting, adding that he was looking at a minimum price of Rs60 a share.
Shares in Spice closed 2.3 per cent down at Rs57.25 in a weak Mumbai market.
The government permits up to 74 per cent foreign investment in telecoms.
"Everybody is planning to come to India. But the issue is what sort of shareholding will be there," he said.
Foreign firms, attracted by the low teledensity and a rapidly expanding customer base, are eying stakes in Indian telecom operators.
Spice has licences to operate in six of the 23 telecom circles in the country, but a paucity of spectrum to transmit the wireless signals, means it cannot immediately start services in all of them. It has operations in Punjab and Karnataka.
Spice had claimed a networth of Rs1,254 crore in its 2006, that included the networth of its stakeholders Modi Wellvest, Super Infosys and TMI (the Indian arm of Telekom Malaysia).
However, the government found that Spice Communications, which had run into significant losses, had not taken into account the debit balance of profit and loss account - negative free reserves.
Spice, which has challenged rejection for pan-India GSM licence by government, has pleaded to the DoT to stay the spectrum allocation process contending that it may neutralise its commercial growth.
Spice, meanwhile, denied it had received a merger proposal from Idea Cellular.
A stake hike by Malaysia Telecomm would help Spice Telecomm leverage on the Telekom Malaysia's operational experience and Spice Telecom's management expertise. Spice said it would also bring in benefits like:
- Pooling technological skills to create innovative new products and services to delight a young, tech-savvy market;
- Leveraging group synergies for global competitive advantage in procurement and resource allocation;
- Create additional revenue streams by cross-selling products and service offerings, resulting in wider product range;
- Cost benefits as combined volume will help achieve lower capital expenditure per unit on network and infrastructure;
- Ensure seamless connectivity across Asia through extensive network coverage;
- Co-location facilities. No duplication of infrastructure and resources in setting up global nodes;
- Open exciting new possibilities of cross-cultural enrichment of content; and
- Twin advantages of strengthening present operation and spearheading new growth strategy.