R COM Gets Permission for MTS Acquisition

By: Reliance Communications
 
DELHI, India - March 21, 2016 - PRLog -- Competition Commission of India has given a green signal to Anil Ambani led Reliance Communications (RCom) to undertake Sistema-Shyam Teleservices (SSTL) that operates under the brand MTS to the company. SSTL at present operates in nine telecom circles across the country.

In an official letter to BSE, Reliance Communications said, "We wish to inform you that we have received observation letters from BSE and NSE. The company and SSTL are proceeding to file necessary applications with the Bombay High Court and Rajasthan High Court, respectively, for approval of the scheme". It was also informed that the deal will close by the mid of 2016.

R Com Chief Executive Officer stated "We are delighted to welcome Sistema Shyam TeleServices Ltd. as a valued shareholder and partner in Reliance Communications Ltd. The combination of our wireless businesses, through the demerger of SSTL wireless business into RCOM for stock consideration, will generate significant capex and opex synergies for mutual benefit. The Indian data market is witnessing explosive growth, and SSTL's proven strengths in that space will further enhance RCOM's capabilities in delivering a superior experience to our valued customers. He also added, ''We are pleased that the addition of SSTL's valuable spectrum holdings in the 800 - 850 MHz band will strengthen RCOM's spectrum portfolio, and extend our ability to provide world class 4G LTE services to our customers in 8 important circles in the country till the year 2033''.

If the acquisition takes place, SSTL will hold 10 per cent stake in RCom and pay off its previous debts before signing the deal. Talking about RCOM, it has sold its tower assets worth Rs. 20,000-22,000 crore to Tillman Global Holdings and PE firm TPG Asia, to pay off the existing debts

As a result of the merger RCom will get 9 million more customers, which will increase its revenue by Rs. 1,500 crore. Besides that, it will also get access to spectrum in the 850 Mhz band. It will then be able to extend this access of 800/850 MHz band in 8 major cities over a period of 12 years i:e from 2021 to 2033.

RCOM is also in talks for a merger with 4G service provider, Aircel. If it happens, RCOM-MTS-Aircel will become a telecom operator with second highest number of consumers.

Refrence Link: http://www.moneycontrol.com/news/business/rcom-gets-cci-g...

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Source:Reliance Communications
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Tags:Reliance Communications, RCom and MTS merger, Reliance
Industry:Business
Location:Delhi - Delhi - India
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