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Reliance Communications and Aircel in talks to merge wireless business

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Reliance Communications has entered into a non-binding but exclusive discussions with Aircel to merge their wireless business operations, the company informed via a notification on the Bombay Stock Exchange.

The telecom operator said that is is in talks with Malaysia’s Maxis Communications Berhad and Sindya Securities and Investments Private Limited, the shareholders of Aircel Limited. The talks however, excludes Reliance Communications towers and optical fibre network infrastructure for which the company is going ahead with the asset sale as announced on December 4.

The objective of a potential merger would be “to mutually derive the expected substantial benefits of incountry consolidation, including opex and capex synergies and revenue enhancement,” said a statement by Reliance Communications.

“The discussions are non-binding in nature. Any transaction will be subject to due diligence, definitive documentation and regulatory, shareholders’ and other third party approvals,” Reliance added.

Merger with MTS

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In November, Reliance merged its operations with Sistema Shyam Teleservices Limited (SSTL) which operates as MTS in India. With this, the new entity will acquire 9 million of MTS’ customers and 800 / 850 MHz band spectrum.

MTS would also hold 10% equity stake in Reliance Communications following the merger. Post  the deal, minority investors of SSTL will be given an option to exchange their shares in SSTL with the pro-rata RCOM shares held by SSTL. The closing of the transaction is expected in the second quarter of 2016 subject to corporate, regulatory and other approvals.

Number of connections at the end of November 2015

TRAI’s data shows that Aircel had 83,995,783 connections at the end of November 2015 and that 70.11% of its connections were active. The Active connection data represents peak VLR (Visitor Location Register) data for the month.

While Reliance Communications showed that it had 110,385,303 mobile connections at the end of the period with 97.06% of its connections were active.

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