RCom, Aircel, Sistema may conduct 3-way merger

telecomasia.net

Indian operators Reliance Communications (RCom), Aircel and Sistema are reportedly negotiating a three-way merger that could bring some sorely-needed consolidation to the nation's crowded mobile market.

The companies have commenced initial talks over an arrangement that could create the nation's third largest mobile operator by subscribers, the Economic Times reported, citing unnamed sources.

Under the proposal Sistema's Indian mobile brand MTS could merge into RCom via a share-swap deal. The combined company would then enter a pact to tie up with Aircel.

According to the report, the second stage of the proposed deal would require both RCom and Aircel to reduce their debt levels via asset sales.

But RCom would reportedly prefer to enter a deal with Aircel involving trading and sharing airwaves rather than a merger.

If a merger deal does go through the sources say Maxis will end up being the largest shareholder in the combined company with a 35-40% stake, RCom's majority owner Anil Ambani having less than 30%, Sistema having less than 10% and the remainder going to RCom's other shareholders.

Aircel is owned by Malaysia's Maxis, while Sistema the parent company is from Russia.

About the author

Commentary

5G and data center-friendly network architectures

Matt Walker / MTN Consulting

Webscale and transmission network operators' interests are aligning as the 5G era dawns

Matt Walker / MTN Consulting

Webscale and transmission network operators' interests are aligning as the 5G era dawns

Rémy Pascal / Analysys Mason

The launch of 5G by South Korean operators serves as a first benchmark for other operators around the world