WHY CHANDRA IS EYEING SATELLITE TELEPHONY MAJORS

Zee TV supremo Subhash Chandra is once again setting the cat amongst the pigeons. The only difference this time he is doing it for even bigger stakes: over the past three weeks he is believed to have made strong efforts to take over the ailing satellite telephony companies, ICO and Iridium. His first effort with ICO though it bettered billionaire cellular pioneer Craig McCaw's bid however saw him ending up a runner up in the $1.2 billion buy. Now he is once again making a try at Iridium which is in the bankruptcy domain.

Why is Chandra making bids for ailing satellite companies which may never see profits or survival in the long or short term? The reasons are several: among the first is the satellites they are operated from, Chandra would like a piece of that stake. His Agrani satellite and satellite telephony venture is a couple of years down the line, though the government has provided it with infrastructure status making it eligible for several tax and other writeoffs. By buying into either ICO and Iridium, Chandra will immediately get not only their bleeding bottomlines but also their satellites, the space parking slots over countries which are hostile to foreigners parking their satellites and downlinking their signals, and ready infrastructure. An acquisition will greatly reduce Chandra's lead time to market, apart from bringing along with it the convenience of a parking slot which is already active.

One does not know where and how Chandra will raise the billions of dollars that he is willing to throw away on ailing satellite ventures. May be he won't. It could well be a positioning strategy by the strategic thinkers and planners in the Zee group. By being one of the bidders for large and well-known investments such as ICO and Iridium, Chandra could well attract the attention, admiration and possible ire of the international banking and financing community and other media, telecom and cable TV companies. And maybe, in the process, their capital and investments for the ambitious ventures that he plans to launch. One of them for which he is seeking an ally is Siticable in which he wants to divest 25% equity at a price of about US $150-200 million.

Chandra is very clear: he wants to be a global businessman and not just an Indian one. If the ICO and the Iridium bids are strategic plays then he might well realise that ambition too.