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COMPARISONS

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ABOUT THE COMPANY

Spice Telecom is the brand name of SpiceCommunications

Spice Telecom is currently operating in the states

of Punjab and Karnataka

Spice Communications Limited was promoted by DilipModi of Modi Wellvest Private Limited

Telekom Malaysia Berhad owns 39.20% through TMI IndiaLimited.

Spices cellular services have a customer base of over 1.8million as at January 2006 in Punjab and Karnataka

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DEAL CHRONOL0GY

Idea Acquires Spicepromoters 40.8%

stake@Rs.77.30 pershare

Idea to make 20%open offer to Spice

Shareholders@Rs.77.30 per share

Idea to make preferentialissue of 46.473 Cr equityshares to TMI@Rs.156.96

per share

TMI to get shares inIdea through shareswap in the ratio of

49:100

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Exit of ModiGroup from SpiceCommunication

Idea gets 60.8%

stake in Spicealong with TMI

TMI gets 14.99%in Ideas equity

capital post theissue

TMI getsaround18-20% inidea Cellular post

the share swap5

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ADVANTAGES TO IDEA

INCREASED CUSTOMER BASE

Through Spice, Idea's mobile subscriber base increases byover 17% to 30.6mn and its market share rises by 165bp to

11.2%.

The company gets an immediate subscriber base in thecircles of Punjab and Karnataka.

If company was to start operations on in these circles, it

would take several months to roll-out,operations post thereceipt of spectrum and most likely in excess of 2-3 yearsat least before the circles would break-even at the EBITDAlevel.

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SPICE AN ACTIVE PLAYER IN TWO CIRCLES

Spice Communications is fairly well-placed in its twocircles of operations, namely Punjab and Karnataka

In Punjab Spice enjoys a 22.5% market share and is thesecond-largest player after Bharti Airtel.

In Karnataka it has 10% of the market share

Spice has an overall market share of over 15%, thusreflecting its fairly competitive positioning

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ACCESS TO CRUCIAL 900 MHz BAND

Spice, being amongst the first two operators in bothPunjab and Karnataka, has spectrum in the 900 MHzband in both these circles

The 900 MHz band has greater propagationcharacteristics, thereby enabling lower capex costs forexpansion of coverage area, as the number of towersand base stations required would be lesser than in the1,800 MHz band.

Thus, this is a positive for Idea, as after completion ofthe transaction, it will have 900 MHz spectrum allotmentin 9 circles out of the 13

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TMI AS AN STRATEGIC INVESTOR

One of the biggest benefits for Idea Cellular on account ofthis deal would be gaining the expertise of TMI as astrategic investor

TMI would get a board seat and comes with significantexperience in emerging market operations in countries likeSri Lanka, Pakistan, Malaysia,indonesia and Bangladesh

TMI also has strong experience in operating 3G networksin other markets, which would be of help for Idea as and

when it bids for 3G licences in India.

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STRONG CASH INFUSION WILL LEAD TO BETTER BALANCESHEET

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DILUTION OF EQUITY

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REASONS FOR SPICE TO MERGE

REJECTION OF PAN INDIA LICENSE-Spice applied for PANIndia License but it was rejected by the Telecom Tribunal. Thismade Spice look for partners and this search ended with Ideaacquiring 40% stake

HIGHLY COMPETITIVE INDUSTRY-Not able to competewith likes of Bharti ,Vodafone etc.

NEGATIVE PROFITS-Low Tariff rates and high competition

hit the Spice Telecoms finances and it made a loss of Rs.59.2Crore in 2007.

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FINANCIALS

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POST MERGERDYNAMICS

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POST MERGER PROBLEM

LOWER EPS- Since Ideas equity will see a 23% diliution thiswill lead to a lower EPS.

EPS= PAT/Number of shares Outstanding

MARGIN PRESSURE

The margin of Idea may be reduced taking in account lowerprofitability of spice.

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THANK

YOU

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