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The fiscal 2005-06 was a watershed year in the company's
history as a new management took over the reins from the promotor, C
Sivasankaran. The fifth largest public company in Malaysia----Maxis
Communications Berhad-acquired Aircel with an overall holding of 74%, as a
result of its 65% direct stake, and 9% indirect stake via its participation in
Deccan Digital Networks. Deccan Digital is the joint venture company (JVC) set
up by Maxis with the Chennai-based Reddy family. The JVC will own a 35% direct
stake in Aircel.
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AIRCEL |
In total, Maxis will directly invest Rs 3,225 crore ($702
mn) for its equity interest, while the JVC will invest the remaining Rs 1,736
crore ($378 mn).
Aircel showed impressive growth of 57%. In FY 2005-06, it
had posted a revenue of 880 crore. As on March 31, 2006, the total cellular
subscribers were 26.12 lakh, which is a jump of 48.4% over last year's figure
of 17.6 lakh. The company has 2,180 BTS covering 858 towns in India.
Aircel's parent company, Sterling Infotech Group, was
lucky in its fourth attempt to sell off the operator. For Maxis, this
acquisition provided an opportunity to build a strong foothold in India, as it
presents an attractive high growth with a low mobile penetration market.
According to Maxis, Aircel contributed a pre-tax profit of Rs 20 crore to the
Maxis Group in Q1 2006. The Group has accounted for the Indian operations as a
26% associate using equity accounting from January 6, 2006 to March 20, 2006 and
subsequently, consolidated as a subsidiary of the Group at 99.3% economic
interest from March 21, 2006 to March 31, 2006.
The Tamil Nadu-based mobile operator stepped out of its
regional mode and has paced up its aggressive plans to be a pan-India player.
Aircel is focused on expanding its services to 5 new circles by year-end. Maxis
hopes that when all 12 circles come into operations, Aircel will serve 58% of
India's total population or an estimated 63.5 crore.
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In addition to its existing circles of Chennai and Tamil
Nadu, it has launched services in five new circles - West Bengal, Orissa
(March 2006), Assam, North East (Nov 2005), and Jammu & Kashmir (August
2005). 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 company has
also applied for licenses for Haryana, Kolkata, Kerala, Punjab, Mumbai,
Karnataka, Rajasthan, and Maharashtra.
Aircel extended its coverage to 600 towns in Tamil Nadu and
plans to bring 250 more towns under its network before the end of this financial
year. This push into smaller towns will also see the number of its towers going
up from 1,500 to 2,400 by the end of the year.
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'We'll foray into new telecom circles' What has changed since the acquisition by Maxis?
In most ways, we are still the same-we are a young What is the focus of Aircel's new management?
We are also focused on developing our Aircel brand to What gives Aircel an edge over competition? This has been popular with the professionals and the |
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Given the strong subscriber growth in the new circles in
the past few months, Maxis plans to invest about Rs 2,140 crore in capital
expenditure this year to support the existing and additional circles targeted.
The capital for these investments will be raised at Aircel's level.