RCom-Aircel merged entity to give strong competition to Vodafone, Idea Cellular

The merged RCom-Aircel entity will give strong competition to its rival private telecom operators like Vodafone India and Idea Cellular in the backdrop of the disruption caused by the launch of operations by Reliance Jio Infocomm, India Ratings and Research (Ind-Ra) said.

• Make Telecom Talk My Trusted Source
• 
• 

“The merged entity will offer strong competition to both Vodafone India Limited (Vodafone) and Idea which are weaker placed, as far as 4G operations are concerned,” the agency said.

Ind-Ra believes that the sector will now have five meaningful players namely, Bharti Airtel, Vodafone, RJio, Idea and the merged RCom -Aircel- Sistema (with a new brand) as the industry moves towards data driven revenues. The RCom-Aircel merger is also a key milestone in the ongoing consolidation in the telecom sector, it said, adding that the merger coupled with RJio’s penetration strategy will spur competition and in turn push tariffs lower.

Ind-Ra said that the spectrum acquisition strategy, particularly around 4G, is an important driver for the consolidation in the telecom sector. This deal provides RCom access to the superior 800MHz band in eight circles with extended validity till 2033, as its own spectrum is scheduled to expire in 2021-2022.

The merged entity will have 448MHz spectrum, which is about 17% of the total spectrum held, is the third largest spectrum holding, following 770MHz of Bharti Airtel and 596MHz of Jio. The top five circles of Aircel are Assam, J&K, UP East, Bihar and Gujarat, while those of RCom are Bihar, Tamil Nadu and Chennai, Delhi, and Mumbai. The merged entity will be positioned as the second largest in the Bihar circle, after Bharti, and overtaking Vodafone and Idea, which were number two and number three respectively.