Maxis to back Aircel despite cut-throat competition - Mobile World Live

Maxis to back Aircel despite cut-throat competition

18 DEC 2017

Malaysia operator Maxis could invest up to $1.1 billion in its troubled Indian arm Aircel in a renewed commitment to the operator after a deal to merge it with Reliance Communications fell through.

Sources close to the company told The Economic Times (ET) Maxis’ owner Ananda Krishnan may invest at least $500 million into Aircel, with the final figure dependant on the company’s debt resolution plan, in a bid to fuel new investment.

Krishnan, who apparently invested $7 billion into Aircel without generating a return over the past decade, was close to completing a merger with RCom this year, but the deal fell through in October due to regulatory uncertainties.

Aircel reportedly sold off its 4G spectrum to market leader Bharti Airtel in preparation for the merger, which was first mooted in December 2015. The deal had been on track in August before falling at the final hurdle.

Maxis’ plan to potentially revive Aircel will depend heavily on the company’s plan to restructure the Indian operator’s debt, which stands at INR15.5 billion ($241.3 million), ET added. As part of the plan, Aircel and Airtel are reportedly in advanced talks over a network sharing or roaming agreement, as it looks to compete amid increasing competition in India.

Reliance Jio’s entrance into the market in 2016 led to a spate of inter-market consolidation agreements.

In addition to Aircel’s failed merger with RCom, Vodafone India agreed to tie-up with Idea Cellular, while Airtel stuck a deal to acquire Telenor’s Indian operations.

Maxis is planning to compete by ploughing capital into Indian states where it has historically performed well including Tamil Nadu, Jammu and Kashmir, and Assam, a company executive told ET.

The unnamed executive added the company would look to increase its capacity to offer data services.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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