DoT could clear RCom-SSTL merger this week

01 Aug 2017

India's Department of Telecom (DoT) could this week grant approval to Reliance Communications (RCom) to proceed with its merger with Sistema Shyam Teleservices (SSTL).

The Indo-Asian News Service has reported, citing unnamed sources, that RCom is likely to be granted approval to proceed with the merger.

The operators have already secured High Court approval for the acquisition, which will provide RCom with valuable spectrum assets in eight telecoms circles. The report states that the merger could be worth 50 billion rupees ($778.9m).

Sistema Shyam Teleservices is a joint venture between Russia's Sistema and local partner the Shyam Group. The company provides services in India under the MTS brand and has around 10 million wireless customers.

But while RCom appears poised to be cleared to proceed with the SSTL merger, the fate of the proposed merger of its wireless business with Aircel is less certain.

The Economic Times has reported that the Department of Telecommunications has set Supreme Court approval for the merger as a condition of the department granting its own approval.

The Supreme Court earlier this year threatened to revoke Aircel's licenses over the failure of top executives of Malaysia-based parent company Maxis to appear in court over a bribery case.

Cancelling the licenses could threaten the viability of the deal, the report states, so telecom ministry officials do not want to risk approving the deal only to have the Supreme Court revoke the licenses.

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