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Reliance Communications, Aircel in talks to merge

22 December, 2015

Billionaire Anil Ambani-led Reliance Communications Ltd (RCOM) is in talks with smaller rival Aircel Ltd for a possible merger that could create India’s second-largest wireless services operator by number of subscribers.

RCOM said in a statement on Tuesday it has entered into a 90-day period of exclusive talks with Aircel’s shareholders, Malaysia’s Maxis Communications Berhad and Sindya Securities and Investments Pvt Ltd, for a potential merger.

The discussions are non-binding and there is no certainty of any transaction, the company said.

Any deal will exclude Reliance Communications’ towers and optical fibre infrastructure, it said.

RCOM had said on December 4 that it was in initial talks with private equity investors Tillman Global and TPG Asia to sell its telecom towers business. 

The talks with Tillman and TPG are part of efforts by RCOM to reduce its net debt of Rs 39,900 crore.

The company has also been looking to consolidate its business. Last month, it agreed to acquire the wireless business of Sistema Shyam Teleservices Ltd through a share swap. Sistema Shyam is a joint venture among Russian firm Sistema, the Russian government and the Shyam Group of India. Sistema Shyam will hold 10 per cent of RCOM under the deal.

If the talks between RCOM and Aircel fructify, the combined company will overtake Vodafone India to become the second-largest cellular services provider by subscribers in India behind Bharti Airtel Ltd. RCOM is currently No. 4, after Bharti, Vodafone and Idea Cellular Ltd. Aircel is ranked fifth.

As of November, Bharti Airtel had 241 million customers while Vodafone India had 192 million, according to data available with the Cellular Operators Association of India, the industry group of GSM mobile service providers.

RCOM had 111 million subscribers as of September. Aircel has about 85 million users while Sistema Shyam, which operates under the MTS brand, has 9 million. A combination of the three companies will have about 205 million customers.


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Reliance Communications, Aircel in talks to merge

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