India’s Reliance Communications (NSE:RCOM) is in advanced talks to buy Sistema Shyam Teleservices (MTS India), and is closing in on a spectrum trading and sharing pact with Reliance Jio, according to RCom chairman Anil Ambani.
India’s Reliance Communications (NSE:RCOM) is in advanced talks to buy Sistema Shyam Teleservices (MTS India), and is closing in on a spectrum trading and sharing pact with Reliance Jio, according to RCom chairman Anil Ambani.
Speaking at the AGM, Ambani also said the company expects to agree a sale of a stake in its tower unit, Reliance Infratel, within the next couple of months.
Ambani was cited saying an agreement to acquire MTS India could be signed within the next month or two.
RCom is India’s fourth largest cellco with some 110.4 million customers, while MTS is a relative minnow with 8.6 million customers, according to Telecommunications Regulatory Authority of India (Trai) data.
Russian conglomerate Sistema (MCX:AFKS), controlled by oligarch Vladimir Yevtushenkov, confirmed in June that it was in exclusive talks to merge its Indian unit with RCom, saying any deal would take the form of a stock swap.
MTS India owns only small blocks of 800 MHz spectrum, and is present in just nine of the country’s more than 20 telecoms service circles, so would struggle to offer LTE operations, Bernstein Research analyst Chris Lane noted at the time.RCom’s own airwaves would be compatible with those of MTS India, as it too owns some 800 MHz spectrum, he added.
Partnership with Reliance Jio
Separately, Ambani was cited saying that RCom is in advanced talks with nascent mobile operator, Reliance Jio, about a partnership which would see the two companies trade and share airwaves.
Jio, owned by his older brother and sometime rival Mukesh’s Reliance Industries, has said it plans to launch 4G services by the end of the year.
Reuters cited Ambani saying that the partnership would enable RCom to access Jio’s 4G network, and Jio to access RCom’s 2G and 3G networks. The two companies also plan to trade and share 4G spectrum, he reportedly added.
Reliance Infratel divestment
Ambani’s comments on Infratel follow a local media report last week that suggested RCom was close to sealing a deal, with four shortlisted bidders all hailing from the US: American Tower and private equity firms Carlyle, Farallon Capital and Tillman Capital.
Infratel is reportedly valued at Rs200bn-Rs240bn (US$3bn-US$3.6bn), including about Rs80bn (US$1.22bn) of debt.
Two of the bidders would like to buy RCom’s entire 96% stake, while the other two want a 51% holding, the report stated.
