Mumbai, June 25: The acquisition of Sterling Infotech’s stake in Aircel for Rs 1,600 crore gives Hutchison Essar the strength it needs to join the league of cellular service providers with a pan-Indian presence.

Aircel, the market leader in Chennai and Tamil Nadu with 1.1 million subscribers on May 31, will be sniping at the heels of Bharti for the cell top spot.

The Aircel deal is the latest in the wave of consolidation sweeping the GSM cellular phone industry. Only months ago, Bharti Televentures acquired 68.5 per cent of Hexacom for Rs 430 crore. Soon after, Idea Cellular bagged Escotel Com for Rs 1200 crore.

The process of consolidation will start with the mega-deal as Hutch would merge Chennai and Tamil Nadu circles. “We have been in India since 1994 and this step marks a continuation of our commitment,” Dennis Lui, managing director of Hutchison Telecom, said.

Sterling’s C. Sivasankaran said the acquisition of Aircel would provide a strong impetus to Hutchison Essar to strive for a leadership position in India’s cellular market. Sivasankaran is known for striking it rich in mobile telephony. Many years back, he had sold out his stake in the Delhi circle for a massive profit.

The Hutch-Aircel deal will be the first intra-circle merger since the announcement of guidelines on the issue. Hutchison already offers cellular services in Chennai.