Birla- At & T-Tata Beats Hutchsion In Race For Rpg Cellcom

The deal could bring about Rs 280 crore to the RPG group. The valuation of the RPG group's 51 per cent stake is calculated on an enterprising value of the company's business at $125 million

Birla-AT&T-Tata combine is all set to pick up the 51 per cent stake held by the RPG group in RPG Cellcom, the cellular telephony provider in Madhya Pradesh.

Hutchison, which was also in the race to grab the controlling stake in RPG Cellcom, lost out to Birla-AT&T-Tata combine in the last round, sources said.

Top sources in the RPG group said: "We are close to signing the deal with Birla-AT&T-Tata combine. How- ever, some technical issues are yet to be sorted out. A clear picture about the deal is expected to emerge by the end of this week.

 

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Although the sources declined to comment on the consideration of the deal as "it is not (technically) struck as yet", the deal could bring a shade over Rs 280 crore to the RPG group.

The valuation of the RPG group's 51 per cent stake is calculated on an enterprising value of the company's business at $125 million.

In addition to these two, other top players like BPL, Bharti, Escotel and the public sector MTNL, were also in the fray to acquire the key link that Madhya Pradesh could provide between north and south corridors as well as east and west, once domestic long distance telephony is opened up.

Sources said the Rs 6,500 crore RPG group, which is in the process of realigning its telecom businesses and identifying future growth strategy, is also scouting for partner to offer a considerable stake of RPG Cellular in Chennai.

The group was the first to enter telecom services in collaboration with the global major Vodaphone AirTouch after the sector was opened up for private players.

On December 31 last year, RPG Cellular had a 24,040 subscriber base, ahead of the other operator Skycell Comm- unications. But RPG Cellcom faced rough weather as it had only 12,030 subscribers, way

below its competitor, Reliance-Nynex which had 18,140 subscribers.

Industry sources said valuation of the RPG Cellcom-Birla AT&T deal could be treated as a benchmark for other telecom players in the country who are drawing up their strategies for expansion or exit.