Spice In Talks With Singapore Company

B K Modi-promoted Spice Communications Ltd is in talks with a Singapore government-owned company to enter into a strategic partnership for sourcing technology and funding telecom projects.

Spice is also planning an IPO by the end of this year or early next year to off-load 10 per cent equity (as per the norms applicable to cellular services companies), B K Modi, chairman, ModiCorp said after a board meeting held here.

"We have discovered an outstanding institution in Singapore and are working closely with them to enter into a partnership for technical and funding resources," according to Abid Hussain, former member of Planning Commission and director of ModiCorp.

 

"As a part of our fresh merger and acquisition strategy, Spice plans to tieup with cellular operators in India to create a corridor between Punjab and Calcutta and then move southwards towards Karnataka," Dilip Modi, ModiCorp's cellular business head and Spice CEO, said.

"A unique highlight of this strategy would be `flexibility' and `customisation' in ownership pattern to suit the interests of the merging operation," B K Modi said. "We would be bidding for the third and the fourth operator in circles," he added.

The crystallisation of the strategy for expansion of the cellular business comes close on heels of ModiCorp inking the deal with Telstra, the largest pan-Asian telecom company, buying out the latter's 49 per cent equity in the Modi-Telstra joint venture, the cellular service provider in Calcutta.

After buying Telstra stake, the company plans to extend the brand name `Spice' in Calcutta, to build and position it as a national brand.

Strategy for the IPO and funding is being steered by O P Dani, director, ModiCorp Board and the M&A strategy by K L Chugh, former chairman ITC and now a director on ModiCorp Board.

"We bought out the Telstra stake at a mutually agreed price. The agreement with Telstra would be consummated over the next couple of weeks. The acquisition of Telstra's stake in line with our strategy to formidable company in the country and become a lead player in the Indian telecom and wireless Internet arena," Dilip said.

There are no plans, however, to change the holding pattern of Spice Communications, in which, apart from the 51 per cent holding of ModiCorp, the remaining 49 per cent equity is shared between Distacom, AIG and Prudential.

As part of its wireless application protocol-based telephony initiatives, the company is working on a proposal to introduce WAP gateway within couple of months. "We have already made investments in the content side of it and before the close of the calendar (also the close of the financial year for the company) things would be in place," Dilip Modi said.

The subscriber base for Spice in Punjab crossed one lakh mark, with 14 out of 15 districts being networked while the combined subscriber base for Spice is 2.5 lakh.