Russia's Sistema in deal to pick up 49% in Aircel- The Economic Times
Hutch had offered to buy Aircel for about Rs. 1,600 crores, but the deal got embroiled in regulatory mess. Informed sources say that Sivasankaran was too close to Jayalalitha (which I am not so sure about), and Dayanidhi Maran wanted to scuttle this deal. Such rumours always exist, but the reality may be something more complex.
Anyway, today's news items across multiple newspapers indicate that Russian company Sistema is offering to pick up 49% stake. Idea Cellular is also keen to buy Aircel. In case of Idea it will be a complete outright purchase as they have no footprint in Tamil Nadu. Hutch won't anymore get involved with Aircel.
The telecom consolidation in India cannot happen without smooth regulatory cooperation. With the FDI limit in telecom having been taken to 74% (with due security provisions, we are told), despite Left protesting vehemently, more investment from abroad is likely. But such investment will be wasted if the sector cannot be consolidated into 5 or so players. Tatas should exit Idea as soon as possible to facilitate Malaysian Telekom taking a lead in pushing Idea forward. I guess AV Birla group is unclear about whether to continue holding stakes in Idea or offload them.
Groups like Spice Telecom (Karnataka, Punjab), BPL (Tamil Nadu minus Chennai, Mumbai, Maharashtra minus Mumbai, Kerala) and a few other teeny weeny players should exit the market after getting a decent return on their investment. They cannot grow and cannot offer quality services on their own.