Global Business Leader Dr. Modi: Creating Telecom History with Idea-Spice Merger

Global Business Leader Dr. Modi pioneered Indian mobile and telecom industry in 1995 by orchestrating India’s first mobile call on the Modi Telstra network. He then went on to found multiple ventures in telecom and mobility space including Spice Communications in 1995, Spice Digital in 2000, Spice Hotspot in 2004 and the acquisition of Si2i in 2009 as a part of his telecom empire. Many of these ventures were critical in laying the foundation of the digital India we see today.

Global Business Leader Dr. Modi’s Spice Communications was also the first company to set up a telecom plant in the private sector in India. After forming a successful joint venture with Malaysian telecom behemoth – Axiata, Spice Communications commenced its operations in 1997 as a cellular services provider in the northern state of Punjab and southern state of Karnataka. Within a span of a few years, Spice Communications was able to capture a market share of around 14.49 %, making it the second largest cellular service provider in Punjab and fifth largest in Karnataka.

In the year 2008, in one of the biggest deals in the Indian telecom sector, Aditya Birla Group‘s Idea Cellular announced to acquire Dr. Modi’s Spice Communications to strengthen its existing position in India. Idea agreed to buy 28.14 crore shares for Rs. 77.30 each, amounting to Rs. 2176 crores, thus resulting in the fourth largest merger and acquisition deal involving an Indian entity. With this acquisition, Idea Cellular got a strategic foothold in Spice’s huge subscriber base in the states of Punjab and Karnataka and became the fifth largest telecom operator.

The IDEA-SPICE merger brought significant benefits to Spice consumers, who saw lower prices along with better network coverage and quality. Spice’s customer base of 87 million benefited in terms of quality and services with IDEA, which had a strong user base in urban areas. They were now able to take advantage of IDEA’s strong mobile applications that  offered features such as video and audio calling, low-cost international calling, and the ability to use your phone number on multiple devices. The merger also leveraged its scale to negotiate lower costs for network infrastructure, spectrum bidding, and to invest more in network expansion and quality. This cost advantage was passed on to customers, who saw a reduction in their mobile bills. 

With the IDEA-SPICE deal, Global Business Leader Dr. Modi was able to create huge value for all its shareholders. Spice’s shareholders received a premium for their shares, strengthening Dr. Modi’s image as a key creator of positive growth and value for all stakeholders.