Hutchison Essar will merge BPL Mobile’s three state circles with itself sometime in early January ‘06. However, the merger of the Mumbai circle of BPL Mobile is likely to take longer, according to informed sources.

Industry sources claimed that the telecom department has approved the merger of BPL Mobile’s state circles with Hutchison and the merger of these three circles with Hutch is likely to be completed early next year. Despite several attempts, Hutch sources were not reachable for comment.

The three state circles of BPL Mobile include Maharashtra & Goa, Tamil Nadu & Pondicherry and Kerala. Since Hutch is not present as an operator across these three circles, the merger of these circles into the Hutch operations is expected to be easier from a regulatory perspective, according to industry sources.

These sources also said that Hutch might continue with the BPL Mobile brand till such time that the Mumbai circle is also merged into Hutch. “They may choose to go in for a brand change all at one go,” said sources.

The completion of the Hutch-BPL Mobile deal is being seen as a precursor to the Hutch Initial Public Offer (IPO). “This (the merger of the state circles) paves the way for an IPO by Hutchison Essar,” said telecom analysts. However, since both Hutch and BPL Mobile operate in Mumbai, it would have to ensure that it complies with regulations on intra-circle mergers that stipulate that the merged entity cannot have more than two-thirds market share of subscribers.

Since Mumbai has six mobile players, the total market share of the merged entity is expected to be a little over 50%. Besides, another GSM player, Idea Cellular too plans to join the fray and has applied for a license to start services in Mumbai. Hutchison had acquired BPL Mobile in July in a deal with an enterprise valuation of over Rs.4, 400 crore.

(http://economictimes.indiatimes.com)