Mumbai, April 2: The Tata group plans to merge its telecom activities into a single entity, but plans to leave out Idea Cellular, where it holds a significant stake. Speaking to The Telegraph, Ratan Tata said, “We have a financial stake in Idea.”

The move indicates that the Tata group has decided to put all its force behind Tata Teleservices, the CDMA mobile player, whose main competitor is Reliance Infocomm.

Except for the Ambanis and the Tatas, the other mobile phone players have gone for GSM technology.

Idea Cellular is a three-way equal joint venture among the Tatas, the Birlas and At&T, with its headquarters in Pune. Its recent financial closure with a project cost of Rs 5,000 crore was the largest ever in the telecom industry.

Telecom analysts said the Tata group’s strategy to concentrate on CDMA technology for its mobile telephony business is correct.

Tata appeared surprised when a shareholder said its main rival in the CDMA business was acquiring Data Access. “No one really knows who owns it,” he said.

Data Access competes with Videsh Sanchar Nigam Ltd (VSNL) in the international long distance business. VSNL monopolised the market when it was government-owned, but now faces competition from players like Reliance Infocomm, Bharti Tele and Data Access.

Commenting on how entry barriers have come down in the ILD business, Tata said, “What took VSNL nearly Rs 2000 crore to set up, can now be established for Rs 100-150 crore only.”