Aircel unlikely to acquire operators in Indian telecom consolidation but would consider merging with others

Indian telecom operator, Aircel is not likely to acquire other telecom companies in the expected upcoming rationalisation in which the number of operators would reduce from around 14 to seven over the next year, the company head told ET.

"At this time we are thinking it is payback time for us," Sandip Das, Director said in an exclusive interview. Aircel may consider merging with other companies to make a more profitable entity, he said. There has been widespread speculation that Aircel's 74% shareholder, Malaysia-based Maxis Communications is looking to sell.

Das said repeated rumours of a divestment demoralise the company's staff, and are not true. Last year Aircel separated the company into two parts, the Network arm - NetCo - that handles the network and the Operations arm - OpCo - that deals with customers and plans. Das said the company views business potential in sharing of active networks among operators, that will be forced from competitive and cost pressures in the sector.

Aircel may sell a part of the NetCo to facilitate such sharing and to monetise its investments, he said. The company has several options, for example two companies may join to initiate the sharing, or a joint venture like Indus Towers - for tower sharing betweenBharti Airtel, Vodafone India, and Idea Cellular - or a strategic partner who may buy multiple assets and sell services to operators as GTL Infrastructure does for towers.

The Indian telecom industry, Das said is currently at a cusp of a second round of investment as the voice market matures and the data market is yet to pick up. "Data demand is not picking up; it has more to do with the ecosystem - the networks, handsets, etc.," Das said.

Das stated the example of the Malaysian telecom operator Maxis that leased its entire 3G network to a new operator, thus using a substantial portion of the vacant capacity on its network and reducing the time to breakeven. In 2010 Aircel had similarly sold its telecom towers to GTL Infrastructure for Rs 8,062 crore.

(C) The Economic Times India