ST Telemedia and TM International to acquire 48 per cent stake in IDEA Cellular

11 December 2004

Kuala Lumpur, Mumbai and Singapore

ST Telemedia and TM International to acquire 48 per cent stake in IDEA Cellular

Singapore Technologies Telemedia (ST Telemedia) and TM International, the international investment arm of Telekom Malaysia (together as a 'Consortium'), have entered into definitive agreements to acquire a 47.7 per cent stake in IDEA Cellular (IDEA or the Company) for a total consideration of approximately US$390 million. Under the terms of the agreements, the Consortium will acquire the entire stake from Cingular Wireless, and simultaneously infuse additional capital into IDEA. Earlier today the Consortium, structured as a 60:40 joint venture with ST Telemedia holding 60 per cent and TMI 40 per cent, entered into agreements with IDEA and its three largest shareholders — Cingular Wireless, the Tata Industries and the Aditya Birla Group.

Upon the completion of the transaction, the Consortium will become the single largest shareholder of IDEA with a 47.7 per cent stake. The transaction is anticipated to be completed in the first quarter of 2005. The Indian shareholders will continue to collectively own a majority 51 per cent stake comprising the Aditya Birla Group with 26.3 per cent, and the Tata Industries with 24.7 per cent. In addition, the Consortium and the Indian shareholders have entered into an option agreement that enables the Tata Industries and the Aditya Birla Group to sell, and the Consortium to purchase their shares in IDEA in the future, subject to certain conditions being met. The transaction is subject to customary closing conditions and government approvals.

Strategic investment

The proposed investment is consistent with the objectives of both ST Telemedia and TM International: to become significant wireless players in the Asian markets; and to participate in the growth opportunities in the Indian cellular market.

"The investment in IDEA Cellular is yet another major milestone in the expansion of ST Telemedia's wireless footprint. It will enhance ST Telemedia's regional presence and c;reate potential new synergies with the Group's existing businesses," commented Mr. Lee Theng Kiat, ST Telemedia's President and CEO. "With the Consortium's track record in managing leading telecommunications companies around the world, and IDEA's competitive strengths, we look forward to delivering increased customer value and building a prosperous future with the company's management and employees."

TM International's Chief e;xecutive Officer, Mr. Christian de Faria, expressed great confidence in the Indian telecommunications market, which he described as "a promising area of growth". He said, "As a wholly-owned subsidiary of Telekom Malaysia, we are optimistic about the role that TM International can play in IDEA and the Indian cellular market."

Telekom Malaysia's Group Chief e;xecutive Officer, Dato Abdul Wahid Omar, explained that Telekom Malaysia has re-strategised its international investments to focus on regional markets closer to Malaysia. This acquisition comes two days after Telekom Malaysia's acquisition of PT Excelcomindo, Indonesia's third largest mobile operator. "In this regard, our investment in IDEA Cellular strengthens our regional presence and complements our existing presence in Sri Lanka where we are the number one and Bangladesh where we are the number two mobile operator. We expect IDEA to contribute positively to the overall performance of Telekom Malaysia in the near future."

"ST Telemedia and TM International are Asia's leading communications companies with global operations. We believe that this investment by ST Telemedia and TM International will improve IDEA's capital structure, position IDEA for next stage of growth and in turn, enhance the value of IDEA's business for all its stakeholders. At present, we will retain our investment in IDEA and in keeping with the Aditya Birla Group's objectives, we may choose to exercise our exit option from the company at a suitable time in the future," said Mr. Sanjeev Aga, Director of Aditya Birla Management Corporation Ltd, part of Aditya Birla Group.

"We welcome the investment made by ST Telemedia and TM International in IDEA Cellular. The rich experience of the new investors in telecommunication services across international geographies will further the growth prospects of IDEA," said Mr. Kishor Chaukar, Managing Director of Tata Industries.

The Consortium is advised by Merrill Lynch and JP Morgan and Cingular Wireless is advised by Deutsche Bank.