Growth story

New Delhi, July 6: Malaysian telecom major Maxis Communications Berhad, which holds a 74 per cent stake in Aircel Cellular, has drawn up a three-year investment plan to expand Aircel’s network across India.

“The next three years will see the company investing substantial amounts to accelerate the growth and development of Aircel as a successful pan-India operator,” a Maxis spokesperson said.

Sources said Maxis was not only keen on expanding Aircel’s footprint but also looking at bidding for third generation (3G) spectrum to strengthen Aircel’s presence as a value-added-service player.

The spokesperson, however, refused to comment on the 3G plans. 3G services are high-end services such as real-time transactions and video streaming, which have immense revenue generation potential.

“India has strong value-added-service growth potential. In the metros and other big cities , non-voice revenues will see rapid growth,” said the Maxis spokesperson.

Sources said with the Indian operations driving the revenues and the earnings of the Malaysian telecom firm, Maxis would not be keen to exit this market in a hurry.

Aircel had contributed 15 per cent to the Maxis group’s revenue during the quarter ended March 31, 2007 compared with 10 per cent in the previous quarter.

It generated revenues of Rs 373 crore and earnings before interest, taxes, depreciation and amortisation of Rs 118 crore in the first quarter.

Reports had suggested that the US telecom giant AT&T was “inching closer” to buying Maxis’ 74 per cent controlling stake in Aircel, valuing the shareholding between $5 billion and $6 billion.

Maxis is controlled by Binariang, which is owned by Malaysia’s second-richest person, Ananda Krishnan.

While it holds 65 per cent directly in Aircel, its joint venture company with the Apollo group’s Reddy family holds the remaining 35 per cent.

The company, in December 2005, acquired a 65 per cent stake in Aircel from Chennai industrialist C. Sivasankaran for $1.08 billion.

In May last year, Kuala Lumpur-based Binariang announced its plans to spend 15 billion ringgit to expand network and coverage in Malaysia, India and Indonesia over the next three years.