India’s Reliance Communications and Sistema Shyam Teleservices (MTS India) could reportedly include Aircel in a merger which would create the country’s third-largest mobile operator.
India’s Reliance Communications (NSE:RCOM) and Sistema Shyam Teleservices (MTS India) could reportedly include Aircel in a merger which would create the country’s third-largest mobile operator.
In late September, RCom chairman Anil Ambani confirmed that the company – India’s fourth largest cellco with some 110.7 million customers – was in advanced talks to buy New Delhi-based MTS India – the number nine player with about 8.9 million customers – and that an agreement could be signed within a month or two.
MTS India parent, Russian conglomerate Sistema, has also confirmed the merger talks and said any deal would take the form of a share swap.
According to an Economic Times report today, the two could also merge with Aircel, the number six cellco with about 81.4 million customers.
The report stated that talks with Maxis Communications-controlled Aircel are still at an early stage and any deal would depend on RCom and Aircel reducing debt. A second source was cited saying that RCom would prefer a spectrum trading and sharing agreement with Aircel, but would consider a merger.
Mumbai-based RCom is considering selling its tower unit Reliance Infratel and reportedly also foreign assets as well as monetising land holdings to help cut debt, which totalled Rs385.96bn (US$5.93bn) at the end of June 2015.
Speaking in late September, Ambani said RCom expected to agree a sale of its stake tower unit Reliance Infratel within a couple of months. According to earlier local reports, the four shortlisted bidders are all from the US: American Tower and private equity firms Carlyle, Farallon Capital andTillman Capital. While two bidders want RCom’s entire 96% stake in the towerco, valued at up to Rs240bn (US$3.6bn) including Rs80bn (US$1.22bn of debt), the other two would like a 51% holding.
A September Reuters report cited the RCom chairman saying that the company is also in talks with nascent cellco Reliance Jio, owned by his older brother and sometime rival Mukesh’s Reliance Industries, about a spectrum trading and sharing agreement.
