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Indian telcos to merge mobile assets under new brand, according to press report.
Indian operators Reliance Communications (RCom) and Aircel have agreed to merge their wireless assets into a joint venture, it emerged this week.
Sources cited by the Economic Times said the firms would each own 50% of the venture.
They added that the deal will also see the merge entity retain the 2.3-GHz spectrum that Aircel had planned to sell to rival Bharti Airtel.
The Economic Times previously reported that Aircel needed funds from the spectrum deal to pay down debt as a prerequisite to the RCom deal. However, its sources on Monday said that both Aircel and RCom will transfer 140 billion rupees (€1.89 billion) in debt to the new entity, some INR40 billion less than under the deal structure they had initially been working to.
RCom and Aircel entered into exclusive merger talks late last year. They agreed on a 90-day exclusivity period.
The telcos expect to close the deal by the end of September, and will spend the intervening months securing regulatory clearances, finalising the management structure and reducing duplication between the businesses, which will have some impact on headcount, one of the paper’s sources said.
The source added that the new entity will be rebranded, but did not share any further details.
The merged entity may be listed a year after closing, depending on market conditions, the source said.
With 110.4 million subscribers at the end of September, RCom is India’s fourth largest mobile operator, claiming a market share of 11.08%, according to the latest figures from the Telecom Regulatory Authority of India (TRAI).
At the same date, fifth placed Aircel had just shy of 84 million customers and a 8.43% share.
Thus, the merged entity would have getting on for 20% of the mobile market – which in total served 996.66 million customers at end-September – making it India’s second largest operator ahead of Vodafone and behind Bharti Airtel.
