RCom, the Anil Ambani-led telecommunications operator, is inching towards combining their cellular operations with Aircel. RCom has announced that they received approval from the Competition Commission of India (CCI) for the proposed Scheme of Arrangement for demerger of the Wireless division of the Company into Aircel and Dishnet Wireless Limited.
To recall, RCom has already received approval from the Securities and Exchange Board of India (SEBI), BSE Limited (BSE) and National Stock Exchange of India (NSE) for the proposed Scheme of Arrangement. RCom also filed an application with National Company Law Tribunal (NCLT), Mumbai Bench, for approval of the said Scheme.
The proposed transaction is subject to other necessary approvals. Post closing, the company and the present shareholders of Aircel Limited will hold 50 percent each of the combined entity.
RCom entered into a merger deal with Aircel in September last year to merge its wireless business with the latter’s wireless operations to create a new entity with assets worth Rs. 65,000 crore. With the merger, we will have our new fourth largest telecom operator both by subscribers and revenues in India.
Further, the RCom-Aircel merged entity will have the second-largest spectrum among all the players in the country. The combined entity will aggregate 448MHz across 850MHz, 900MHz, 1800MHz, and 2100MHz spectrum bands.
RCom also confirmed a merger with MTS India which is expected to be completed by the end of March. However, there are no details on this merger yet.
The Aircel merger is supposed to be completed by October 2017. Additionally, some rumors indicate that Tata Teleservices in talks to join the entity of RCom-Aircel-MTS. Reportedly, Tata Teleservices was not able to take up the pressure created by Reliance Jio and wants to merge with RCom. It was also said that Anil Ambani had approached the Tata Sons Chairman, N Chandrasekaran for a possible merger.
If the rumors are believed to be true, the RCom-Aircel-MTS-Tata Tele entity would have revenue market share of over 18 percent as compared to Airtel’s 31 percent share. Earlier today, Idea Cellular has confirmed the merger with Vodafone India. Needless to say, the merged entity will become India’s leading telecom operator.