Birla, Tata buys off Cingular Wireless stake in IDEA

Birla, Tata buys off Cingular Wireless stake in IDEA

Tata Group and the AV Birla Group have announced plans to buy out the Cingular Wireless stake in IDEA Cellular. It was a joint venture deal between these companies and now Idea becomes only the second mobile provider to be fully owned by Indian companies. The deal is going to cost the duo around Rs. 13 Billion and this news fully demonstrates their strong interest in the telecom business.

Market analysts believe that this purchased 32.91 per cent stake in Idea Cellular is likely to be divided equally between Tata and Birla. Tata Industries had reportedly already shown their interest in buying half the stake of Cingular in Idea for around $150m. Birla also would like to increase their stake in the company to 50%. Tata would as a result have a little less than 50%.

Reports also said that Cingular Wireless was interested in getting rid of its share in the Indian mobile company after the news of Department of Telecom spiking a bid by a consortium of Singapore Technologies Telemedia (STT) and Telekom Malaysia to acquire it came in the market. The deal required that the company involved be not allowed to have over 10 percent cross holding in the same circle.