Aircel Cellular Ltd.

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In 1994, Aircel Cellular Limited (ACT) (formerly called RPG Cellular Services) was awarded a 10 year license by the Department of Telecommunications, Government of India, to provide cellular phone service in the telecom circle of Chennai (formerly known as Madras). Aircel Cellular Limited was originally owned by RPG Enterprises (51%), AirTouch (20%), Vodafone (26%), Mitsubishi (1.5%), and Itochu (1.5%) in 1998. The ownership structure had changed a few times since then. In December 2003, Sterling group acquired 100 percent stake in RPG Cellular Limited from RPG Enterprises and Vodafone and renamed the company Aircell Cellular Limited. Aircel Cellular Limited was 100 percent owned by Aircel Televentures, a holding company for Sterling Group’s cellular ventures. In December 2005, Malaysia’s Maxis Communications Berhad in consortium with India’s Reddy Group purchased 100% stake in Aircel Televentures for US$ 1.08 billion. Aircel Televentures was renamed Aircel Limited and ACT was made a 100% subsidiary of Aircel Limited. The initial investment in the network was about US$17 million. The company committed to pay an annual fee of US$1.9 million for the first three years and US$140 per subscriber per year thereafter. The license term was later changed to 15 years. However, like many other companies, RPG Cellular faced difficulties in paying its license fees. To reduce the financial burden placed on the telecom operators, a new revenue sharing license fee structure was introduced with the New Telecom Policy in July 1999. This payment structure enabled all telecom license operators in 1999 to switch to a new 15% revenue sharing policy, provided they complete their payment on accumulating dues by January 31, 2000 and that both operators in the circle agree to switch over to the new system. The company launched its commercial service in October 1995. As of December 2004, Aircel Cellular Limited was the leading cellular service provider in Chennai and had close to half a million subscribers. None None