Update: On September 30th, Rajasthan HC approved the merger deal between RCOM and Sistema Shyam Teleservices Limited (SSTL), RCOM informed in a BSE filing. The deal is pending for sanction before the Bombay HC,
Earlier: In March, Shareholders of Sistema Shyam Teleservices (SSTL), which owns the MTS brand in India have approved the merger of the company with Reliance Communications (RCOM) in a meeting convened by the Rajasthan High Court, reports Money Control. The company confirmed this to MediaNama and a spokesperson from SSTL told MediaNama that this was done through a voting system. However, a formal declaration will be made publicly after all the votes have been counted.
The deal between RCom and SSTL is valued at around $690 million (~Rs 4,500 crore).
Deal gets nod from regulators
Note that earlier in January the BSE and NSE had both approved the merger deal following which in February, the Competition Commission of India and too had approved the merger deal. RCOM’s board members also gave a nod regarding the same in this month.
It needs further approval from the Rajasthan and Bombay High Court after which RCom is expected to approach the DoT with further filings.
The merger deal was first announced in November, under which MTS would hold 10% equity stake in Reliance Communications. With this, the new entity will acquire 9 million of MTS’ customers and 800/850 MHz band spectrum. At the time, the company said that this would extend the validity of RCOM’s spectrum in 800/850 MHz band in 8 important circles by a period of 12 years from 2021 till 2033.
Gurdeep Singh, CEO of consumer business of Reliance Communications had said in an analysts’ call last August that the company would not be taking on any of MTS’ liabilities through the stock swap.
RCOM customer base drops after CDMA migration
The company started migrating CDMA customers to 4G in late June, and as it makes the mandatory switch to 4G, the company reported total customer base of 99.9 million at the end of Q1FY17, loosing close to 3.7 million connections during the quarter. In comparison, the company had reported a total subscriber base of 103.6 million at the end of last quarter (Q4 FY16). In the same quarter last year, RCOM had 111.1 million subscribers.
Other deals and spectrum sharing
RCOM-Aircel merger Last month, RCOM announced that it has signed “definitive documents” for merging of its wireless business with Aircel Limited, RCOM said in a statement today. Both companies had sent in their definitive proposal in June for regulatory approval.
RCOM-Jio spectrum sharing: Last month, a Mint report said that RCOM and Reliance Jio had virtually merged their networks as per statements isseud by Anil Ambani. Both companies had entered into a strategic partnership to share spectrum to provide LTE services. RCOM and RJio have signed agreements in spectrum allotment in 800 MHz band across 9 Circles from RCOM to Reliance Jio. The companies also agreed to share spectrum in 800 MHz band across 17 Circles.