Everyone seems to have been carried away by the names involved. When the Birla-AT&T-Tata combine merged with BPL Communications in end-June, the pink brigade went to town with screaming headlines: Biggest Merger in India Inc., said one financial daily; Bharti, Hutchison to feel the heat, predicted another; deal to benefit industry, reported a third. And each quoted CEOs of rival cellular service providers saying how, there would eventually be only three to four players in the market. There's little doubt about the numbers mentioned, but there's just a chance, heretical as it may sound, that the new entity doesn't figure among them.

We must be joking, right? A corporate with an enterprise value of over Rs 10,000 crore, a customer base of 9 lakh plus (BPL Communications alone accounts for over 5 lakh of these subscribers), and with an equity of Rs 5,600 crore can't just be wished away. Actually, we are as serious as can be.

The new company, let's call it b-Tab, will end up with a presence in just one metro circle, Mumbai; four A class circles, Gujarat, Maharashtra, Tamil Nadu, and Andhra Pradesh; one b class circle, Kerala; and have a marketshare of just under 25 per cent. That may seem huge, till you see things at the disaggregated level: in the lucrative metro circles, its share is under 20 per cent; Bharti's is over 28 per cent.

It is true that B-Tab will have the financial wherewithal to pose a threat to any other cellular company in India and the company has already bid for fourth operator licences in Delhi, Chennai, and Karnataka where it does not have a presence. Fittingly, it is the capital city that will decide the ultimate winner. It is already the biggest cellular market in the country, and the number of cellular subscribers in Delhi will almost double by the end of 2001. But the process of issuing licences is likely to take six months, and it won't be until late 2002 that B-Tab gets to launch its service in Delhi.

The cost of acquiring this licence won't be too high, especially given the fact that the rollout of the fourth operator and basic service providers, who will be offering 'limited' mobile services on the Wireless in Local Loop (wiLL) platform, could coincide. And by 2002, when (and if) B-Tab starts operations in Delhi, it will be faced with a competition that already has a million subscribers.

The deal has gone through smoothly, although there was enough room for protracted negotiations. While Birla-AT&T-Tata and BPL Communications have roughly the same enterprise value and equity, in terms of market share, the latter outpaces the former by a factor of 1.5-odd. ''The relative equity value is kind of abstract. Eventually, the parties involved have to sit together, negotiate, and agree,'' says Sanjeev Aga, CEO, Birla-AT&T-Tata, which will hold a 50.7 per cent stake in the venture.

BPL Communications' Rajeev Chandrasekhar should be the happiest with the deal. His company gets to own the single-most significant share, 49 per cent, in the largest cellular operation in the country. But BPL now has to sell its stake in the BPL US West operation in Maharashtra (US West is owned by Media One, which AT&T acquired). Birla-AT&T-Tata runs the other Maharashtra operation, and one entity can't run both cellular operations in any circle-the money that brings in (51 per cent of an estimated Rs 1,200-Rs 1,300 crore) could come in useful. ''This venture will develop into one of the premier institutions of the 21st century,'' exults Chandrasekhar.

For a man who once told BT that BPL Communications would consider exiting the cellular business if wiLL went through, that's quite a volte-face. His new-found confidence, perhaps, stems from the merger entity's Rs 5,600 crore enterprise value. But for the merger to pay, the four partners may have to consider looking beyond the cellular domain, and an integrated telecom operation. With the merging entities maintaining that they will compete in the basic services domain, that could take some doing.