Indian mobile operator Spice Communications plans to raise between USD250 million and USD300 million in an initial public offering (IPO) due to be completed before the end of the year, according to the Times of India. The proceeds will be used to help the cellco restructure its USD215 million debts and expand its services to new regions. A further USD350 million could be raised in 2008 via a combination of debt and vendor financing. In total Spice plans to invest around USD2.5 billion in expanding its networks and services in the coming years, including USD2 billion in entering new telecom service areas and around USD500 million in expanding the existing business. The remaining investment will come from Spice’s investors, including the BK Modi Group and Telekom Malaysia™, which acquired a 49% stake in the cellco for USD178.8 million in June.
Spice was created in 1997 and operates in the Punjab and Karnataka circles, where it competes with Bharti, Hutchison and BSNL. It offers pre- and post-paid GSM call plans aimed largely at the youth market. Spice has been one of few operators in India to operate solely on the markets that it originally launched in, but is now looking to cash in on the country’s telecoms boom and has applied to expand its services nationwide.