Reliance Communications is India’s fourth biggest telecom operator in terms of wireless subscriber base with 9.87 crore customers while Aircel ranks sixth with 8.8 crore subscribers.
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According to certain media reports, RCom- Aircel merger announcement is a done deal and announcement on the same could be made soon.
The deal will help reduce Reliance Communication’s debt by Rs 20,000 crore ($3 billion), or more than 40 per cent of its total debt, while Aircel’s debt will fall by about Rs 4,000 crore, the companies said.
In November previous year, Reliance Communications had announced the takeover of the telecom business of Indo-Russian venture Sistema Shyam (brand name MTS) in a deal valued at Rs 5,000 crore ($730 million), involving both a stock-swap and payment towards spectrum.
Anil D. Ambani, Chairman, Reliance Group, said, “Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the Indian telecom sector, first, with RCOM’s acquisition of the wireless business of SSTL (Sistema / MTS), and now, with the combination of our business with Aircel Ltd.in a 50:50 Joint Venture with MCB”.
The highly competitive telecom industry is set to witness the biggest consolidation deal, nearly a week after billionaire Mukesh Ambani launched Reliance Jio ‘s services. The establishment of the joint venture, worth Rs 35,000 crore, is the largest-ever consolidation deal in the telecom sector in India.
Earlier, Reliance Capital announced hiving off its home loan business into a separate entity and list it on the stock exchanges.
Aircel is India’s fifth largest GSM-based mobile service provider with a subscriber base of 65.1 million.
This will be the second-largest spectrum holding amongst all operators, said the company, spread over 448 MHz, 850 MHz, 900 MHz, 1,800 MHz and 2,100 MHz bands.
This combination is expected to create substantial long term value for shareholders of both, RCom and MCB, given the benefits of the wide-ranging spectrum portfolio and significant revenue and cost synergies, he added.
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The board will have equal representation from the two sides, with 50 per cent shareholding each, said a statement from Reliance Communications.
