MUMBAI, MAR 1: In a major consolidation in the cellular phone industry, Aditya V Birla group, Tata Industries and US telecom firm AT&T have signed a memorandum of undersanding to merge their cellular businesses in three states in the country, a joint statement said on Wednesday. While Tatas have lincese for Andhra Pradesh and Gujarat circle, Birla-AT&T have Maharashtra (excluding Mumbai), Goa circles. "The Aditya Birla group, Tata Industries and AT&T today signed a memorandum of understanding expressing their intent to merge the cellular properties owned by Birla AT&T Communications Ltd and Tata Communications Ltd, subject to conclusion of definitive agreements and various statutory approvals," it said. The Birlas and AT&T are currently partners in Birla AT&T Communications which offers cellular services in the western states of Gujarat, Maharashtra and Goa. The Tata company runs a cellular phone business in the southern Andhra Pradesh state. The American International Group holds 10 per cent equity in the cellular firm. The statement did not give financial details of the proposed merger, but said it will result in a joint venture whose equity will be equally split between the three partners. "This combination will result in a joint venture company wherein each of the three partners will have an equal holding. (and) will provide cellular services in the neighbouring states of Maharashtra and Goa (excluding Bombay), Gujarat and Andhra Pradesh." Analysts say the merger will certainly push its competitors to look for alliances and partners. While BPL is competing with Birla-AT&T in Maharashtra and Goa, Birla-AT&T has locked horns with Fascel of Hindujas in the Gujarat circles. ``The structure of the property has to be formed out. We cannot set any timeframe to kick off the operations of the new venture since it depends on the requisite approvals from the telecom regulatory authority," Chaukar said. Valuation of the both the ventures will be done by a leading merchant banker shortly. "Globalisation and growth are becoming a necessity. Consolidation of cellular ventures is likely to take its momentum in the coming months," Kishore Chauker of Tata Industries said here today. At present, Tatas have a subscriber base of about 60,000, while Birla AT&T has touched a user-level of 1,05,000 in their respective locations. The merged entity will have a combined cell subscription of more than two lakh shortly, he added. "The companies will continue to use their existing brand names till we get the consent from the government. We may or may not use a single brand name under the new venture,'' he added.
