Telekom Malaysia may gain management control of Spice

Telekom Malaysia is likely to gain management control of Spice Communications with the promoters, the Modis, either exiting completely or retaining a marginal stake.

Telekom Malaysia is expected to buy the Modis' 40-per cent stake in Spice and merge it with Idea later. The Malaysian company, which has a 39 per cent stake in Spice, will then end up as a shareholder in Idea.

Promoters of Spice Communications Ltd, the country's seventh largest mobile phone company by subscribers, are in three-way discussions involving  partner Telekom Malaysia Bhd, Japan's NTT DoCoMo Inc and local firm Idea Cellular Ltd for the stake sale, sources said.

Spice Communications wants to scale up operations to compete more effectively with bigger rivals such as Bharti Airtel Ltd, Reliance Communications Ltd and Vodafone Essar Ltd, but is unable to do so under present circumstances.

While Etisalat of UAE and Japan's NTT DoCoMo could be interested parties, Spice Communications chairman BK Modi said he was open to Telekom Malaysia increasing its stake to 74 per cent in the company.

Telecom Malaysia partners Etisalat and NTT DoCoMo in some markets.