etisalat in talks with Spice to enter Indian market

Dubai, Mumbai: etisalat said on Wednesday it had talks with India's Spice Communications and others about possibly making an investment to enter the Indian telecom market.

Shares of Spice have surged almost 30 per cent during the last three trading days. They jumped 10.24 per cent yesterday.

"India is a very attractive market for etisalat and we are studying different market entry strategies to determine the most appropriate fit," etisalat chairman Mohammad Omran said in a statement.

"We have also entered into direct meetings with various entities, amongst them Spice Communications," Omran said.

Spice chairman Bhupendra Kumar Modi, who owns 21 per cent of the company, said he could not sell for another two years because of an agreement with Spice's second-biggest investor, Telekom Malaysia.

The Modi family, through Modi Wellvest, owns 40.8 per cent of Spice, making it the biggest shareholder, according to Spice's Web site

"Unless Telekom Malay-sia agrees to sell, we can't bring in anyone else," Modi said. Several firms have approached him about buying his stake, Modi said, declining to identify any.

Spice Communications was listed on the Indian stock exchange last year after its parent, Spice Corp, raised Rs5.2 billion ($130 million) in an IPO.

etisalat said it is also looking at bidding for an Indian telecom licence.

State-controlled and privately held Gulf Arab telecom companies, like etisalat, Kuwait's Mobile Telecommunications and Qatar Telecommunications, have stepped up foreign acquisitions in the last three years, buoyed by rising earnings in the world's biggest oil-exporting region.

etisalat operates in 16 countries including Egypt, Saudi Arabia and Pakistan. In March, it started a company in India to develop software products and mobile phone applications.

Shares of Etisalat, up just over three per cent this year by Tuesday's close, ended 2.05 per cent higher yesterday.

Investment
Virgin seeks DIC support

Virgin Group Ltd has held informal talks with Dubai International Capital (DIC) about securing investment backing from the $12 billion sovereign wealth fund, Britain's Times reported yesterday, without citing sources.

Possible financial support for Virgin could come from a sale of a stake in Virgin Active, which runs health clubs, or a mobile phone joint venture in the Middle East, the newspaper said.

A group of Virgin executives is understood to have visited Dubai recently to meet DIC officials.