Hong Kong: Malaysia's Axiata Group Bhd, which owns about a fifth of mobile phone carrier Idea Cellular Ltd, does not plan to sell its stake in the Indian company, considering itself a long-term investor, Axiata's chief executive said on Wednesday.
Idea, controlled by the Aditya Birla conglomerate, is the country's fourth-biggest mobile operator with more than 100 million subscribers. Axiata bought a stake in Idea in 2008.
In February, Axiata said it took a charge of 1.1 billion Malaysian ringgit ($348 million) after writing down its investment in Idea. Indian media reports have said Axiata is looking to sell the stake.
"We believe in the long run," Axiata President and Group Chief Executive Jamaluddin Ibrahim told Reuters on the sidelines of a mobile industry event in Hong Kong.
"In fact we have raised our stake slightly," he said, referring to a 0.9 percent stake buy in August that took Axiata's total holding to about 20 percent.
Idea is operating in a fast-growing yet ferociously competitive mobile market. A vicious price war in the crowded 15-operator market has kept profits under pressure for the last two years, while a multi-billion telecommunications licensing scandal has prompted regulatory changes.
India's government is in the process of overhauling decade-old telecoms rules and there is little clarity yet on several contentious issues, leading to uncertainty among market players.
"There are concerns," Jamaluddin said. "But we are positive on Idea. We are positive on India."
Idea last month said it was focusing on increasing revenue from high-margin data services after reporting a sharper-than-expected drop in quarterly profit.
Idea shares are up more than 42 percent this year, outperforming the broader Nifty index, which has lost about 18 percent. Top Indian mobile carrier Bharti Airtel has risen nearly 13 percent this year.
First Published: Wednesday, November 16, 2011, 14:57