June 28, 2001
Birla-Tata-AT&T and BPL team up to form India's premier mobile services company
Birla-Tata-AT&T and BPL Communications Ltd have signed an agreement to consolidate their operations, subject to Board and Statutory approvals.
This combine will result in the creation of the largest cellular JV Company in India, with a subscriber base close to one million, constituting over 24% of all cellular users. The footprint of this JV will cover 38% of the country's population and 51% of all fixed line telephone users.
The Joint Venture will provide cellular services in Madhya Pradesh, Chattisgarh, Gujarat, Mumbai, Maharashtra, Goa, Andhra Pradesh, Tamil Nadu and Kerala. The contiguity of its markets accords it a unique position.
The JV will offer world class quality and service to consumers in these states.
It will jointly pursue the future expansion of its footprint. The BPL franchise in Maharashtra does not form part of the JV.
The Joint Venture will aim to be the preferred choice of consumers, lenders and investors. It will move to a common brand name and a new corporate identity in a phased manner.
The relative equity stake will be 49.32% for the BPL consortium and 50.68% for the Birla-Tata-AT&T combine.
Says Mr. Ratan Tata, Chairman, Tata Industries, "BPL Communications Ltd and Birla-Tata-AT&T are two strong entities in cellular telephony in the country. Coming together, the new combine will constitute an even stronger force, with a large subscriber base and a large footprint. I am confident that this new enterprise will grow further and will provide the Indian consumer with quality service in the years to come."
Says Mr. Kumar Mangalam Birla, Chairman, The Aditya Birla Group, "We are indeed delighted that our original investment has today evolved into the largest cellular force in the country. This merger accords the benefits of scale to take consumer service to a new high. I am confident that this JV will develop into one of the premier institutions of the 21st century."
Says Mr. Rajeev Chandrasekhar, Chairman, BPL Communications, "We are pleased to partner with the Birlas, Tata and AT&T along with our existing relationship with France Telecom, and I am convinced that this partnership and this combine will soon establish itself as a definitive telecom franchise in the country."
Mr. Jordan Roderick, Head of International Operations for AT&T Wireless Services said, "This merger combines the strengths of four organizations and will undeniably provide consumers the best that wireless communications has to offer in India. AT&T Wireless is committed to working with our partners to build and operate quality wireless networks in India."
Commenting on the merger, Mr. Nimesh Kampani, Chairman, JM Morgan Stanley, the exclusive financial adviser to BPL who structured the merger for them, said, "The merger is by far the largest domestic M&A transaction till date and clearly creates the largest wireless telecom company in India, which will attract significant investor interest. We are indeed very happy to have played a role in bringing the partners together in this transaction."
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