Date:02/03/2006 URL: http://www.thehindubusinessline.com/2006/03/02/stories/2006030203650400.htm

Back Aircel applies for eight more circles

Our Bureau

Maxis shareholders okay acquisition

Chennai , March 1

Aircel Ltd, the cellular telephone company that has been acquired by Maxis Communications Berhad of Malaysia, has applied for licences to operate in eight more circles. Maxis is waiting for regulatory approvals from both Indian and Malaysian authorities to complete the acquisition.

According to a press release from Maxis, Aircel will expand its services to 10 circles by end of the year. Services have been launched in five of these circles — West Bengal, Orissa, Assam, North East and Jammu & Kashmir — in late 2005, and the company expects to roll out services in five other markets — Bihar, Himachal Pradesh, Madhya Pradesh, Uttar Pradesh (East) and Uttar Pradesh (West) by the year-end.

The release said Aircel had received an additional 1.8 MHz spectrum in Chennai to support its growth and frequency for Bihar where it was expected to roll out its services shortly.

In addition, the release said, the company had applied for licences for Haryana, Kolkata, Kerala, Punjab, Mumbai, Karnataka, Rajasthan and Maharashtra.

The release said Maxis' shareholders at an extraordinary general meeting on Wednesday approved the company's acquisition of Aircel. Maxis will hold a controlling 74 per cent equity interest in Aircel, of which 65 per cent will be a direct stake and the balance through a joint venture — Deccan Digital Networks Pvt Ltd.

The joint venture company would own a 35 per cent direct stake in Aircel. In total, Maxis would directly invest $702 million for its equity interest and the joint venture $378 million.

The release quoted Maxis' Chairman, Mr Tan Sri Dato Megat Zaharuddin, as saying that "we are committed to making the significant investments necessary to become a pan-Indian player. Investments of $500 million are required to support the roll out in the new circles where we have either launched services or are in preparation for the launch."

Maxis' Chief Executive, Mr Dato Jamaludin Ibrahim, said more investments were planned to support the existing and additional circles that the company was targeting. The intention was that the capital for these investments be raised at the Aircel level, the release said.

It may be recalled that Maxis signed an agreement in December 2005 with Mr C. Sivasankaran of the Sterling group to acquire Aircel, jointly with the Reddy family, promoters of Apollo Hospitals and Indo National.