The Hindu Business Line : BPL Mobile, Escotel, RPG, Spice Telecom forge alliance

(From left) Mr Umang Das, Managing Director-Corporate Affairs, Spice Communications, Mr F.B. Cardoso, President & CEO, BPL Mobile, Mr Dilip R. Mehta, Managing Director, RPG Cellular, and Mr Rajan Swaroop, CEO, Escotel Mobile, at the launch of MobileFirst in Mumbai.

MUMBAI, March 26

FOUR cellular operators in the country - each with moderately large footprints - have formed an operational alliance that would compare with the pan-India presence of the largest operators in the country.

Claiming a subscriber base of three million across 12 different circles, BPL Mobile, Escotel, RPG Cellular and Spice Telecom today announced they were allying under the name of MobileFirst.

The largest cellular groups in the country, Bharti and Hutch, in that order, have over 2.5 million subscribers each.

The alliance insisted this is an operational alliance only and not a precursor to any kind of corporate merger, but that this would "offer enhanced value across tariffs, roaming, long-distance calling and new-generation technology and services.''

Drawing parallels with the Star alliance of the airline industry, Mr Dilip Mehta, Managing Director, RPG Cellular, said: "Each operator will retain its own brand name in its circles, however, each operator will also identify itself as a member of MobileFirst."

The four operators would jointly promote the name of MobileFirst, said Mr F.B. Cardoso, President and CEO, BPL Mobile.

The other plans include jointly leveraging subscriber bases to tie up with handset manufacturers to offer "bundled" deals where the handset is offered with the service, the handset cost worked into the service package.

BPL has presence in the circles of Mumbai, Maharashtra, Tamil Nadu, Kerala; Escotel in Haryana, Kerala, UP West, UP East, Rajasthan and Himachal Pradesh; RPG Cellular in Chennai; and Spice Telecom in Punjab and Karnataka.

Some of the more high-profile circles missing in this set are Delhi (with the largest subscriber base in the country) Gujarat, Andhra Pradesh, Madhya Pradesh, Kolkata and Chhattisgarh.

For extending the advantages of MobileFirst to these crucial circles, MobileFirst would have "strategic" partners." "We are already talking to Idea Cellular and to the Hutch group for this," said Mr Mehta.

Analysts see this as a surprise move as each of the foursome in the new alliance has been associated with different plans or deals. They also wondered whether groups such as Idea Cellular or Hutch would want to be known as members of MobileFirst in select circles.

BPL has had a memorandum of understanding with Idea Cellular; the MoU has lapsed and shows no signs of revival. Whereas, analysts have been predicting dire times for small-footprint operators such as Escotel, Spice and RPG, which they felt would soon be swallowed up by the bigger players. In fact Escotel is in the process of selling out its Punjab circle to the Hutch group and there were talks that Spice wanted to sell its Karnataka circle to BPL.

However, many mergers or acquisitions have been stalled on account of differences over valuations or on account of regulatory hurdles which make it difficult for operators with overlapping footprints to effect corporate mergers. The recent regulatory move to allow for buying and selling of licences might iron out these hurdles for the industry, said a telecom analyst.

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