India's RCom, Aircel confirm 50:50 wireless venture - Mobile World Live

India’s RCom, Aircel confirm 50:50 wireless venture

29 FEB 2016

Reliance Communications (RCom) and Aircel, which announced in late December they were discussing a merger, have agreed to set up a 50:50 entity that will be operational by the end of Q3, the Economic Times reported.

The rebranded company, after receiving the required regulatory clearances, will become the country’s second largest operator, with just over a 19 per cent market share. Current number two Vodafone has a 19 per cent market share, according to GSMA Intelligence. RCom has just under an 11 per cent share, and Aircel, which is 74 per cent owned by Malaysia’s Maxis, has an 8.4 per cent share.

RCom and Aircel will each transfer INR140 billion ($2.05 billion) of debt to the new entity, the Times said. In addition, Aircel will hold on to its 2.3GHz spectrum that it planned to sell to Bharti Airtel.

A source familiar with the deal said the entity may be listed a year after the deal closes, subject to market conditions.

After spinning off its wireless division, RCom will focus on its existing data centre, direct-to-home TV, fibre, enterprise and sub-sea cable operations.

Meanwhile, the Competition Commission of India last week approved RCom’s merger with Sistema Shyam’s India unit, in a deal valued at INR50 billion ($733 million) and involving both a stock-swap and a payment towards spectrum. The two companies began talks in June for a possible merger via a stock swap.

SSTL, which operates under the MTS brand, is one of the country’s smallest operators with 8.6 million connections, or less than 1 per cent market share.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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