As per the merger plans with Birla-AT&T, which has cellular license in theMaharashtra, Gujarat and Goa circles, all the three firms - Tatas, Birla,and the telecom giant AT&T - will hold equal stakes of 33.33 per cent eachin the merged entity. According to sources, both the companies are currentlynegotiating for a price for the AIG's 10 per cent stake in the venture. "Wewould like to settle the issue amicably since AIG is a long-time partner ofthe Tatas in other ventures as well," sources added.

Birla-AT&T officials said the issue would not create any delay for themerger. When contacted, Tata official spokeswoman said: "Tatas are inparleys with AIG since it is an equity partner in its cellular venture. Butit is too premature to say that whether Tatas will buy AIG's stake as aprelude to the merger with Birla-AT&T." However, she declined to respond toa questionnaire sent by eFE.

Tata Communications is largely held by the Tata group with AIG holdingaround 10 per cent. Until recently, Tata Communications was a joint venturebetween the Tatas and Bell Canada and Bell Canada pulled out of the projectfollowing the acquisition of its stake by the Tatas.

The Birla-AT&T-Tata combine is expecting the nod from regulatory authoritiesfor the merger. After receiving the approval, the merged entity may go foran overseas listing to raise funds to the tune of about $200 million. Tatasand Birlas are also in the process of finalising a common brand name fortheir cellular operations, according to sources.

The proposed merger is also likely to witness top-level changes in theircellular entities. It is not known which company will run the operations inits circles. Also, the issue regarding the chairman of the merged entity isyet to be solved. JM Morgan Stanley, the investment banker to the merger,will do a valuation of all existing ventures of the groups and advise on thefuture investments of the new entity, including a possible foray into basicand long-distance telephony.

Tatas have a cellular subscriber-base of about 60,000 in AP wherein therival operator is Bharti Telecom. Since Bharti has already unveiled a majormarketing initiative in Andhra Pradesh, the merger with Birla-AT&T will helpthe Tatas push its marketshare.