Tech Telecom

The long-awaited merger with Aircel is announced by Reliance Communications for creating country’s fourth largest phone company in terms of customers and revenue. The merger is done by Anil Ambani-led Reliance Communications and promoters of Aircel, Maxis Communications Berhad (MCB). This merger will be largest-ever consolidation in the Indian telecom sector.

The combined entity will create a strong operator clearly ranked amongst India’s top 4 telcos by customer base and revenues, also ranking amongst the top 3 operators by revenues in 12 important circles, RCom said.

RCom and MCB will hold 50% stake in the merged entity, equal representation of Board of Directors and Committees and will be managed by an independent professional team under the Board supervision. The merged entity will have the second-largest spectrum holding amongst all operators, aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands, and will enjoy enhanced business continuity through the extended validity of spectrum holdings till 2033-35.

“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. We expect this combination 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,” Anil D. Ambani, Chairman, Reliance Group, said.

“This deal further reinforces MCB’s commitment to India. Since acquiring Aircel in 2006, MCB has invested in excess of Rs 35,000 crore ($5.2 billion) into Aircel, making this one of the largest foreign investments into India, not only in the telecom industry but across all sectors. The magnitude of this investment, and the further equity commitment in support of this deal, are underpinned by MCB’s belief in the long term growth potential of both India and the Indian telecom sector,” MCB said in a joint statement.

RCom will continue to own and manage its high growth businesses like Data Centers, optic fibre and other related telecom infrastructure. This merger will strengthen Balance Sheet and growth plans. The merged company will also have access to nationwide 4G LTE services on the sub-1 GHz band, under RCOM’s existing nation-wide spectrum sharing / ICR arrangements with Reliance Jio Infocomm.