TM Acquires Spice Stake

KUALA LUMPUR -- Telekom Malaysia Berhad (TM) today secured a critical piece in its regional footprint, with the acquisition a 49% stake in Spice Communications Private Limited (Spice) of India for a consideration of USD178.85 million. The acquisition, made through TM’s international investment holding company TM International Sdn Bhd (TMI) involved the purchase of the stake held by Deutsche Bank AG and Ashmore Investment Management Limited consortium (DBA). The remaining 51% remains with the existing shareholders, the Mcorp Global Ltd and its associates (Mcorp).

A statement jointly released in Kuala Lumpur and New Delhi stated that the definitive agreements governing the transaction were executed in Kuala Lumpur today. Completion of the transaction is expected within a month, subject to closing conditions and regulatory approvals. A media conference-cum-briefing explaining the transaction was also held in Kuala Lumpur jointly by senior TM and Mcorp officials.

Spice is a privately held company incorporated in India providing cellular telecom services in the states of Punjab and Karnataka. The company commenced operations in 1997 after receiving its cellular licences from the Government of India. With the Company’s recent decision to migrate to the Unified Acess Licensing regime, the scope of services allowable has since broadened to further include full and limited mobility fixed and wireline services, VAS, as well as broadband services. Through new applications, the Company is also in the process of obtaining licences for 6 new circles (namely Jammu/Kashmir, Haryana, Rajasthan, Himachal Pradesh, Uttar Pradesh West/East), as well as National Long Distance (NLD) and International Long Distance (ILD) licences.

Strategic Investment
According to TM Chairman Tan Sri Mohd Radzi Mansor, the proposed investment is consistent with TM’s objectives of becoming a significant mobile player in the Asian markets, and to participate in the growth opportunities in the Indian cellular market. TM, which has re-strategised its international investments to focus on regional markets closer to Malaysia, has strong presence in the Asia Pacific region, with investments in Sri Lanka, Bangladesh, Indonesia, Cambodia, Singapore and Pakistan.

“India is the missing piece in our regional footprint. Now with Spice as part of the TM family, it strengthens our regional presence and complements our existing presence in Sri Lanka where we are the number one, and Bangladesh where we are the number two mobile operator. We are excited about sharing our experience and learn more about the Indian market from Spice.

With Punjab being the most prosperous state in the country and Karnataka dubbed as the “Silicon Valley” of India, there is tremendous potential for mobile telephony in these markets. We are optimistic that Spice will contribute positively to the overall performance of TM in the near future” he said.

Reiterating this, TM Group CEO Dato’ Abdul Wahid Omar described organic growth as the key approach for creating shareholder value in Spice. “Apart from growth through new cellular circles expansion, we are excited about the implementation of other services under the Unified Access licensing regime. TM and its partner Mcorp will seek to grow Spice to be a market leader in the geographies it operates in, including attaining a pan-India presence,” he said.

“Spice customers today join TM’s global mobile subscriber base of over 20 million. Apart from TM’s operational and management experience both in Malaysia and key Asian regional markets, Spice customers stand to benefit from through the creation and innovation of new products and services, sharing of technological experience and implementation, and the leveraging of group synergies such as in global procurement,” he further added.

Telekom Malaysia Berhad