Reliance Communications is holding merger talks with Aircel and Sistema that could lead to the creation of India’s second-largest mobile operator by subscribers.
Sources cited by the Economic Times on Wednesday said that phase one of the three-way deal would see RCom take control of MTS-owned Sistema Shyam TeleServices (SSTL) via a share swap.
The Hindu Business Line reported in late September that talks between the two telcos are at an advanced stage and an agreement could be signed within the next month or two.
Meanwhile, according to Wednesday’s ET report, phase two of the merger would involve some sort of tie-up between Reliance Communications and Aircel; although sources said that talks are at an early stage, and any agreement would be contingent on both companies reducing their debt levels.
If a deal between all three telcos is reached, it would create a mobile operator with 202.1 million subscribers, based on the most recent figures from the Telecom Regulatory Authority of India (TRAI).
That would make the combined company the country’s second-largest player behind Bharti Airtel, which has 233.0 million customers, and ahead of Vodafone India, which has 186.6 million.
According to the ET’s sources, the merger would see Aircel’s Malaysian parent Maxis become the biggest single shareholder with a stake of 35%-40%, followed by RCom, which would own less than 30%. Sistema would be left with a stake of less than 10%.
