Hutch moves to merge businesses

The Hutch group has kicked off the process of consolidation of its five companies operating in India, providing services across 12 circles.

Hutchison Max Telecom (HMTL) has filed an application with the Foreign Investment Promotion Board (FIPB) for the Hutchison Essar Telecom group of companies to consolidate its various telecom interests in India under a single entity.

The application seeks permission for Hutchison Essar Telecom Limited (Delhi), Fascel Limited (Gujarat), Hutchison Telecom East Limited (Kolkata), Hutchison Essar South Ltd (Andhra Pradesh, Karnataka, Chennai, Punjab, UP West, West Bengal) and Aircel Digilink India Ltd (UP East, Rajasthan, Haryana), to transfer all their shares to HMTL, and then become shareholders of HMTL.

The consolidation will create one of the largest mobile operations in the country, which can derive many operating synergies, the Hutch group said in a media statement.

Around two years back, the group had publicly indicated that it would consolidate all its telecom interests in India. Yesterday's announcement is a logical fallout of that.

The combined subscriber base of the entity at the end of May is 5.6 million and the licensed areas cover approximately 56 per cent of India's population.

The company operates its services under two brands in India "" the Hutch and Orange brands. Except Mumbai, the services across all the other circles are operated under the Hutch brand.

The company has retained the Orange name in Mumbai due to the substantial brand equity it enjoys in the city.