UAE's Etisalat in talks with Spice Telecom

By James Cordahi and Janaki Krishnan

DUBAI/MUMBAI (Reuters) - Emirates Telecommunications Corp (Etisalat) said on Wednesday it had talks with India's Spice Communications and others about possibly making an investment to enter the Indian telecom market.

Shares of Spice have surged almost 30 percent during the last three trading days. They jumped 10.24 percent on Wednesday.

"India is a very attractive market for Etisalat and we are studying different market entry strategies to determine the most appropriate fit," Etisalat Chairman Mohammad Omran said in a statement.

"We have also entered into direct meetings with various entities, amongst them Spice Communications," Omran said, though no agreements have been made.

Spice Chairman Bhupendra Kumar Modi, who owns 21 percent of the company, told Reuters he could not sell for another two years because of an agreement with Spice's second-biggest investor, Telekom Malaysia.

The Modi family, through Modi Wellvest, owns 40.8 percent of Spice, making it the biggest shareholder, according to Spice's Web site

"Unless Telekom Malaysia agrees to sell, we can't bring in anyone else," Modi said. Several firms have approached him about buying his stake, Modi said, declining to identify any.

Spice Communications was listed on the Indian stock exchange last year after its parent, Spice Corp, raised 5.2 billion rupees ($130 million) in an IPO.