Reliance Commmunictions close to merging SSTL's India ops
30 September 2015
Billionaire Anil Ambani controlled Reliance Communications (RCom) is in advanced stages of finalising a merger of Sistema Shyam TeleServices Ltd's (SSTL) Indian operations with itself.
Separately, the company is also in discussions for spectrum sharing with Reliance Jio Infocomm, even as it is close to closing the stake sale in its tower business.
''The discussions with SSTL for a merger of its Indian operations into RCom through a stock swap are at an advanced stage. ''The proposed merger is highly value accretive for RCom as it will, in eight important circles, extend the validity of the 850 spectrum by a significantly long period of 12 years, all the way up to the year 2033,'' Ambani said in the company's 11th AGM today.
SSTL, which offers CDMA telecom services under the brand MTS, is a joint venture between Sistema of Russia and Shyam Group of India.
Further, RCom is also in advanced stages of discussions for a stake sale in its independent tower company, Reliance Infratel.
RCom expects to sign a deal within the next month or two, Ambani, said, adding the transaction will result in a substantial reduction of its overall debt. RCom's overall debt stands at about Rs38,000 crore as of June end.
The company, which holds 800–850 MHz band, is also at an advanced stage of discussions for finalising spectrum trading and sharing with Reliance Jio Infocomm.
There are also reciprocal agreements for roaming by respective customers on each other's networks, Ambani said, adding these arrangements will facilitate RCom customers' access to Reliance Jio's 4G/LTE networks.
For RCom this becomes an ''asset-light and minimal capex model'', while Reliance Jio Infocomm customers have the benefit to fall back on the former's 2G and 3G networks. RCom hold 5 MHz in the 800–850 MHz band across the country.