Sterling's deal for Aircel stake sale lapses

The group is still open to selling stakes in Aircel.

Sterling Infotech's non-binding agreement with AFK Sistema to sell 49 per cent in its telecom arm, Aircel, lapsed on March 31. Sterling executives said the company was not in talks with anyone at the moment though the group was open to selling stakes in Aircel.

Sterling Infotech, promoted by C Sivasankaran, announced in February it had agreed to sell a 49 per cent stake in Aircel for $450 million. Aircel operates in the Chennai and Tamil Nadu circles and has a subscriber base of 502,000 and 1,183,000, respectively (in January 2005).

The lapsed Sistema deal came on the heels of a similar agreement in June 2004 with Hutchison Essar, which ended since the government rejected the proposal. Hutchison Essar had agreed to acquire 49 per cent for $362 million.

Sterling wants to sell the stake in Aircel to finance its plan of providing mobile services in seven circles across north and northeast India. The group has estimated the investment for the operations at around Rs 2,000 crore.

Another group company, Dishnet Wireless, plans to roll-out Wi-fi and WiMax services this month across eight cities. The company will invest Rs 250 crore over a year on the project.

Dishnet's roll-out follows a government notification to de-license the 2.4 Ghz and 5 Ghz frequencies, on which the Wi-fi platform works. A company executive had earlier told Business Standard that Dishnet planned to use the 2.6 Ghz and 3.3 Ghz frequencies for the service.

Industry sources said any service provider wishing to use frequencies other than the those de-licensed would have to seek the permission of the telecom department's wireless planning cell.

Dishnet is awaiting a clearance from the DoT for the complete rollout of its wireless services.