The Tatas are planning to offer a migration package to the 2 million subscribers of Idea Cellular to Tata Teleservices, which will operate fully mobile code-division multiple access services under a unified telecom licence.

Tata Teleservices is looking at various options for the migration, including offering a buyback to Idea customers, wherein the company will take back the global standard for mobiles handsets in return for CDMA phones.

For a smooth transition

Tata Teleservices may offer a buyback to Idea customers, wherein the company will take back the global standard for mobiles (GSM) handsets in return for CDMA phones The deal will depend on the telecom regulator's final guidelines on intra-circle mergers and acquisitions, and the Birlas and AT&T accepting the proposal The migration will take 6-8 months after all the hurdles are cleared

The Tatas could also discuss the option of offering AT&T and the Aditya Birla group, which together hold a 68.5 per cent stake in Idea Cellular, equity in Tata Teleservices through a swap.

This is because the Tatas, who hold a 31.5 per cent stake in Idea, are not keen to buy out the partners in Idea, which runs a GSM network.

It is, however, not clear whether the GSM subscribers would like to switch over to CDMA services, considering that the number portability issue has not been sorted out.

The deal will also depend on the telecom regulator's final guidelines on intra-circle mergers and acquisitions, and the Birlas and AT&T accepting the proposal.

The migration will take 6-8 months after all these hurdles are cleared.

If the plan does not work out, the Tatas may consider selling their holding in Idea. A Tata spokesperson, however, declined to comment on the issue.

Idea Cellular and Tata Teleservices operate in five common circles -- Maharashtra, Goa, Andhra Pradesh, Gujarat and Delhi.

The only circle in which Idea operates and Tata Teleservices does not is Madhya Pradesh. However, Tata Teleservices has applied for a licence to operate CDMA services in Madhya Pradesh.

By June 2004, Tata Teleservices has projected that it will become a national player in the CDMA sector with over 4 million subscribers if the Idea deal goes through.

Reliance Infocomm has 5 million subscribers. Apart from the six circles in which it operates, Tata Teleservices has applied for 11 new licences recently, where it expects to roll out services by June 2004. The company expects to have 8 million subscribers by the end of 2004.

Analysts say in the face of regulatory uncertainties, the Tatas have preferred to hedge their bets on both GSM and CDMA technology.