RCom-Aircel to own 50% each in new wireless entity, to become third largest telco: Report

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Reliance Communications and Aircel will combine their respective wireless business and will hold 50% each, a change from an initial merger plan to create a new listed company to run their combined wireless businesses.


RCom and Aircel had started a 90-day period of exclusive merger talks on December 22. An Economic Times report said that the deal is expected we expect to close the deal by September 30, and the new entity will be rebranded, and may be listed a year after the deal closes, which is around September 2017, subject to market conditions.

The report said that both the companies will now each transfer Rs 14,000 crore of debt to their wireless company instead of Rs 10,000 crore each. In addition to that both the telcos will retain the 2300 MHz 4G airwaves that Aircel planned to sell to Bharti Airtel, ET report said citing multiple people familiar with the matter.

With consensus over the merger, both the companies will now work on getting regulatory and court clearances. Further, both the companies will be finalising the management and leadership structure and reducing duplication such as offices, back-end technology services and sales and distribution, the report said, adding that the exercise will have an impact at the employee level.

RCom-Aircel deal would create an entity with about 200 million subscribers, compared with Airtel’s 246 million, Vodafone’s 195 million and Idea’s over 173 million. In addition, the merged company will have almost a fifth of the entire industry spectrum holding in all bands – 2G, 3G and 4G – which will make it a strong challenger to not just Idea but to market leader Bharti Airtel and Vodafone India.

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