Indian mobile operators Reliance Communications and Aircel have reached a final agreement on merging, after first starting talks last December. The new company will strengthen RCom's position as the fourth largest operator in terms of subscribers, just behind Idea Cellular, after acquiring sixth-placed Aircel. Last year RCom already agreed to take over MTS India, the mobile operator controlled by Russian conglomerate Sistema. The new company also claims to have the second-largest spectrum holdings on the market, with a combined total of 448 MHz.
The deal will see Aircel's owner, Malaysia's Maxis Communications own 50 percent in the merged entity alongside RCom; each company will have equal representation on the board. RCom said the deal will help it reduce its debt by around 40 percent, while also result in significant synergies. The latter are estimated at INR 200 billion (USD 3 billion) in terms of capital expenditure and operating costs saved. The companies said they are also in talks with international investors on injecting new equity to help grow the combined business.
RCom will hold on to its data centre, fibre infrastructure and other related assets for its domestic and global enterprise business. The merger remains subject to regulatory and shareholder approvals, and is expected to close in 2017.
