Reliance Communications (RCOM) is in discussions to merge with MTS, Sistema’s Indian telecom business through a stock swap, RCOM has said, in a BSE filing: Reliance Communications Ltd has informed BSE that Reliance Communications (RCOM) and AFK Sistema have entered into exclusive discussions on a potential merger between the Indian telecom business of Sistema Shyam TeleServices Ltd. (SSTL) and RCOM through a stock swap. The discussions are indicative and non-binding in nature, and remain subject to due diligence, definitive documentation and approvals, as may be necessary. There is no certainty that any transaction will result. This isn't the first time there has been talk around MTS merging with another company. Towards the end of 2013, there was talk of Aircel, Tata Teleservices and MTS merging. Common ground in Mobile broadband There is a potential strategic alignment between the two companies: both focus on mobile broadband. RCOM has been pitching itself as a company that focuses on Internet connectivity, which plays well with SSTL/MTS, which has done the same for a few years. RCOM reported 33.7 million mobile Internet connections for the quarter ended March 31, 2015 (Q4-FY15). What’s particularly interesting is that RCOM’s 3G connection base has surpassed its 2G mobile Internet connection base, and this is probably the only telecom operator for which this has happened. RCOM reported a total 3G connection base of 17.4 million, higher than its 2G base of 16.3 million. MTS India had 1.8 million mobile data card subscribers for the quarter ended March 31,…
