In a deal that gives it indirect entrance into the high-growth Indian Telecom market, Saudi Arabia's largest carrier Saudi Telecom Co. has bought a 25-percent piece of Malaysia's Maxis Communications for $3 billion.
As a result of this purchase, Saudi Telecom Co. will own 18.5 percent of GSM carrier Aircel, which is 74-percent owned by Aircel. Aircel provides services in Chennai, Tamil Nadu, West Bengal, Assam, Orissa, Jammu & Kashmir, Bihar, Himachal Pradesh and the North-East. It has a subscriber base of 5.5 million.
Saudi Telecom reportedly had been considering India for some time, this purchase is the first major investment outside Saudi Arabia for the government-owned carrier. "
Officials in the Middle Eastern country apparently have the same concerns over a national telco having ties with foreign carriers, but it looks like those concerns weren't enough to kill the deal. The deal may raise eyebrows of security concerns in India. I will be posting the developments on the blog
Showing posts with label Maxis. Show all posts
Showing posts with label Maxis. Show all posts
Saudi telecom to buy 25% of Maxis Communications
Saudi Telecom Co, the largest phone company in Saudi Arabia, bought 25 per cent of Malaysia's biggest mobile-phone operator Maxis Communications Bhd to reach out to more subscribers. Saudi Telecom paid 11.4 billion riyals ($3 billion) for the acquisition, its first major foreign purchase, the company said on Tuesday in a statement posted on the Saudi stock market Web site. The deal will give the company access to a market of 1.4 billion people. “The transaction will be financed through borrowing and self-financing,” the state-controlled company said. Phone companies in Persian Gulf monarchies are expanding as domestic markets mature and demand increases. Saudi Telecom competes with Etihad Etisalat in Saudi Arabia. A third mobile-phone company, Saudi Mobile Telecommunications Co, will enter the market next year.
Saudi Telecom was looking at markets in the Middle East and Asia, and this purchase makes sense because both markets share the same culture, and Maxis services a huge population in Malaysia, India and soon Singapore. The transaction would value Maxis at about $12 billion. Maxis is controlled by T Ananda Krishnan, Malaysia's second-richest man.
I was thinking why the Indian companies are not aggressively moving into the South East Asian, Middle Eastern and African markets. They are rather agreesively fighting for the telecom space within India, in the process cutting each others margins heavily. The rates of telecom services in India are too low and the companies should start looking out of India, instead of chopping each others profits within India.
Saudi Telecom was looking at markets in the Middle East and Asia, and this purchase makes sense because both markets share the same culture, and Maxis services a huge population in Malaysia, India and soon Singapore. The transaction would value Maxis at about $12 billion. Maxis is controlled by T Ananda Krishnan, Malaysia's second-richest man.
I was thinking why the Indian companies are not aggressively moving into the South East Asian, Middle Eastern and African markets. They are rather agreesively fighting for the telecom space within India, in the process cutting each others margins heavily. The rates of telecom services in India are too low and the companies should start looking out of India, instead of chopping each others profits within India.
Malaysian Tycoon Ananda Krishnan plans to buy Maxis communication - Aircell India to gain from plans
Malaysian tycoon Ananda Krishnan plans to buy out the country’s largest mobile operator, Maxis Communications in a deal that could be worth at least $5 billion. Maxis gave no reason for the buyout plan but industry analysts speculated that Krishnan, the country’s second-richest man after Robert Kuok, might want to relist Maxis offshore and raise foreign capital to fund international expansion. Maxis, which faces a price war and a maturing market at home, is expanding into larger and less-developed Asian markets like Indonesia and India to drive growth.
Maxis can be listed overseas, feels telecom analysts , the buyout plan could be a first step toward raising money to fund major investments in India and Indonesia. Krishnan-controlled firm Usaha Tegas, a major shareholder in Maxis, has notified the company that it and its affiliates will make an offer by Thursday, Maxis said. Krishnan, a self-made billionaire of Sri Lankan origin, held an indirect interest of 47.05% in Maxis as of April last year, according to company data. At the current share price, a buyout bid for the remainder of about 53% would cost around 17.4 billion ringgit ($5.1 billion).
Malaysia’s mobile phone market is fast reaching saturation, forcing Maxis and smaller rival, state-controlled Telekom Malaysia, to expand overseas for growth. In Malaysia, more than three-quarters of the 26 million population own a mobile phone. Maxis stock, which was suspended from trade before the company statement, has climbed nearly 50% in the past 12 months, outperforming the wider market by about 7%. The stock fetches 16.2 times projected earnings, compared with India’s top mobile phone services firm, Bharti Airtel, on 38 times and China Mobile on 18.2 times.
Ananda Krishnan’s plans to buy out Maxis Communications will boost the company’s plans for India, say analysts. Mr Krishnan owns just under 48% of Maxis, which has a controlling stake (74%) in Aircel, India’s fifth largest GSM player with over 5 million subscribers. More so, considering that Maxis had recently said that it would need an additional $3 billion to expand operations in India in the future. Maxis two overseas ventures — India’s Aircel and Indonesia’s PT Natrindo Telepon Selular . The company’s profits have surged 46% over the last 12 months riding on strong subscriber gains both at home and in India. In fact, Aircel accounted for 13% of Maxis’s fourth-quarter revenues. The company plans to invest over Rs 2,000 crore in its Indian operations in 2007-08, as it has set a target of reaching 8 million subscribers during this period. In the last fiscal, Maxis had invested about Rs 2,700 crore in Aircel, of which Rs 1,350 crore was paid to the Department of Telecom (DoT) towards entry fee for licenses in 14 new circles in the country, while the remaining was spent on network expansion. Aircel holds licence to offer telecom services in 9 telecom circles in the country and aims to be a pan-Indian player and expand its presence to all 23 circles by the first half of 2009. As the first step, the company recently launched services in both Himachal Pradesh and Bihar. Aircel was recently been granted both the national and international long distance licences by DoT.
The reclusive 68-year-old Krishnan, a former oil trader, also controls Malaysian pay-TV operator Astro All-Asia Networks and gambling and leisure firm Tanjong. The Harvard Business School graduate, with a net worth of $6 billion according to Forbes magazine, was a close friend to former premier Mahathir Mohamad.
Maxis can be listed overseas, feels telecom analysts , the buyout plan could be a first step toward raising money to fund major investments in India and Indonesia. Krishnan-controlled firm Usaha Tegas, a major shareholder in Maxis, has notified the company that it and its affiliates will make an offer by Thursday, Maxis said. Krishnan, a self-made billionaire of Sri Lankan origin, held an indirect interest of 47.05% in Maxis as of April last year, according to company data. At the current share price, a buyout bid for the remainder of about 53% would cost around 17.4 billion ringgit ($5.1 billion).
Malaysia’s mobile phone market is fast reaching saturation, forcing Maxis and smaller rival, state-controlled Telekom Malaysia, to expand overseas for growth. In Malaysia, more than three-quarters of the 26 million population own a mobile phone. Maxis stock, which was suspended from trade before the company statement, has climbed nearly 50% in the past 12 months, outperforming the wider market by about 7%. The stock fetches 16.2 times projected earnings, compared with India’s top mobile phone services firm, Bharti Airtel, on 38 times and China Mobile on 18.2 times.
Ananda Krishnan’s plans to buy out Maxis Communications will boost the company’s plans for India, say analysts. Mr Krishnan owns just under 48% of Maxis, which has a controlling stake (74%) in Aircel, India’s fifth largest GSM player with over 5 million subscribers. More so, considering that Maxis had recently said that it would need an additional $3 billion to expand operations in India in the future. Maxis two overseas ventures — India’s Aircel and Indonesia’s PT Natrindo Telepon Selular . The company’s profits have surged 46% over the last 12 months riding on strong subscriber gains both at home and in India. In fact, Aircel accounted for 13% of Maxis’s fourth-quarter revenues. The company plans to invest over Rs 2,000 crore in its Indian operations in 2007-08, as it has set a target of reaching 8 million subscribers during this period. In the last fiscal, Maxis had invested about Rs 2,700 crore in Aircel, of which Rs 1,350 crore was paid to the Department of Telecom (DoT) towards entry fee for licenses in 14 new circles in the country, while the remaining was spent on network expansion. Aircel holds licence to offer telecom services in 9 telecom circles in the country and aims to be a pan-Indian player and expand its presence to all 23 circles by the first half of 2009. As the first step, the company recently launched services in both Himachal Pradesh and Bihar. Aircel was recently been granted both the national and international long distance licences by DoT.
The reclusive 68-year-old Krishnan, a former oil trader, also controls Malaysian pay-TV operator Astro All-Asia Networks and gambling and leisure firm Tanjong. The Harvard Business School graduate, with a net worth of $6 billion according to Forbes magazine, was a close friend to former premier Mahathir Mohamad.
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