The decision of Idea Cellular to buy out Spice Communication has come after the decision by latter’s chairman that company is for sale. The main promoter Telekom Malaysia holds 39.2% share in Spice and has not yet given its consent on it and according to the Chairman of the Spice, they are still waiting for the official message. The talk is going on the background of big mergers and acquisitions talks across the world in telecom industry.

 

Earlier both companies had applied for pan-Indian licenses for their expansion. While Idea Cellular has received more licenses, Spice’s application was rejected by the Department of Telecom. This deal is towards filling the same gap, says an telecom analyst. Therefore a merger with Idea Cellular is a good option for Spice to become a pan-Indian operator.

 

With operation in two circles and three million customers base Spice will certainly add value to Idea Cellular services which already has 26 million customers and operates in 11 circles. The holdings of Modi Group is 40.8 per cent in Spice Communications. Earlier in this week Mr Modi had wished a merger could lead to a strategic fit and the deal would create fifth largest mobile entity in the country.