Themes: Brand Management
Period : 1995-2001
Organization : Hutchison Telecom, BPL
Pub Date : 2001
Countries : India
Industry : Telecommunications
The Making of an Empire Contd...
In November 1999, it sold its 44.8% stake in Orange to Mannesmann. When Vodafone acquired Mannesmann, Hutchison got 5% of Vodafone's share capital. In March 2000, the company sold 1.5% of these shares for $4.7 billion (Rs 20,445 crore). It was part of this money that Hutchison was using to fund its expansion in India. All the other Indian telecom service providers, put together, did not have that kind of ready cash.
Mobile ManiaBy the end of 2000, mergers, acquisitions and alliances had become the order of the day in the cellular phone market. Commented Atul Chopra, Managing Director, New Delhi based investment bank, Asia Pacific Capital, who was involved in some of the telecom deals, "You can either acquire or get acquired. There is no third option." |
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"The entire mobile business in India has been notionally valued by investment bankers at $ 4.5 billion (INR 22,500 crore) which is nowhere near the valuation of say, the country's software business. So why this madness?" asked one. Mobile operators hoped that India would follow the rest of the world in opting for more cellular phones. The consistently falling call rates and a number of new services that mobile operators were offering was expected to drive the boom in the market. The impact of some of these developments was already being felt.
The mobile market was expected to grow at a phenomenal 66% in 2000 and add one million new subscribers to touch 2.7 million subscribers by April 2001. In 2000, the mobile market was worth Rs. 2000 crore in terms of revenue and was expected to cross Rs. 5,000 crore by 2002. The mobile market was also expected to become huge in the near future and waiting to carve out their share of this pie would be a handful of players. Once the foreign companies were allowed to hold 100% stakes in Indian mobile firms, foreign majors with deep pockets would expand the market much faster.
The major players in the cellular phone market, other than Hutchison Max Telecom, were Bharti Telecom, Essar Teleholdings, BPL Mobile/BPL Cellular, RPG Cellular/Cellcom, Spice Cell/Spice Communications, Fascel/Celforce and Birla Tata AT&T.
TABLE I
MAJOR PLAYERS IN THE CELLULAR MARKET
Companies |
Stakeholders |
% |
Bharti Cellular |
Bharti Televentures |
56 |
Bharti Mobile |
Bharti Televentures |
74 |
Sterling Cellular (Essar Cellphone) |
Essar |
51 |
BPL Mobile |
France Telecom |
26 |
BPL Cellular |
BPL Cellular Holdings |
51 |
RPG Cellular |
RPG Group |
68 |
RPG Cellcom |
RPG Group |
51 |
Spice Cell |
Modicorp |
45 |
Fascel |
Hinduja Group |
40 |
Birla AT&T |
Aditya Birla Group |
51 |
Tata Cellular |
Tata Group |
64 |