RCom-Aircel wireless merger deal likely to conclude by next week: Report

By July 23rd, 2016 AT 1:37 PM

CNBC-TV18 on Thursday reported that RCom is likely to conclude the merger deal next week with the founders of Aircel, for combining the wireless businesses of both the telecom companies. Both RCom and Aircel will together infuse Rs 5,000 crore of equity funding in the merged entity. With a net worth of around Rs 50,000 crore, both RCom and Aircel are likely to transfer Rs 14,000 crore debt to the merged entity, the report said.

rcom-aircel

RCom and Aircel have been in exclusive talks since December on a much-anticipated amalgamation in what would be the first in-market telecom merger of national scale in the country. Both the parties have been discussing a deal under which RCom and Aircel’s promoters will hold 50% each in a merged entity, which would be renamed and could emerge as India’s No. 3 carrier by users, ahead of Idea Cellular and trailing market leader Bharti Airtel and Vodafone India.

A merger would help both companies stay relevant in an intensely competitive market as India. Individually, the companies – both struggling with debt and falling market share – have no way of challenging their bigger rivals.

As per terms of the pact, RCom will hive off its wireless business into a separate arm, which will be combined with Maxis-owned Aircel, with both companies having equal ownership. The new $6 billion entity proposed will remain unlisted in the initial years and operate under a new brand name.

Aircel is 74% owned by Malaysia’s Maxis Communications Berhad (MCB) with the rest with Sindya Securities and Investments Pvt. Ltd. Earlier media reports said that Aircel CEO Kaizad Heerjee may head the merged wireless entity.

Both Aircel and Rcom have spectrum to offer 3G in 13 circles in the country. The new entity, if formed, will gain from Reliance Jio’s 4G spectrum and help to offer broadband services without spending huge capex and opex on network and spectrum.

A merger of the wireless businesses of RCom and Aircel will also help RCom expand its GSM services in West Bengal, Bihar and Assam, where it did not win back its 900 MHz spectrum in the March 2015 auctions, according to agency ICRA.

Physiotherapist by day and techno buff by evening, Esmail is our very own in-house spectrum specialist. He has a keen eye for the Mobile data and DTH segments.

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Santanu SarkarKaushik RoyRhishav (Kolkata)RaktimYaqoob Recent comment authors
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Kaushik Roy
Kaushik Roy

It would be better if Aircel have been merged with Telenor.

But telenor is really unlucky in Indian Telecom Market as it is more capable than Aircel and RCOM both financially and technology wise. RCOM is a liabilty in Indian Telecom

Aircel is the lucky operator with PAN India Licence and it is the poorest among PAN India Operator.

Rhishav (Kolkata)
Rhishav (Kolkata)

I don’t know when this next week will come. Have been hearing next week since quite some time now. I don’t trust RCom in finalizing the deal.

Santanu Sarkar
Santanu Sarkar

Well said Rishav, Raktim and Sutripta!!!Rcom is beyond tolerance.nothing seems to be good about this company, be the network, service quality, tariffs, reliability or honesty.they are for sure the no.1 fraud operator in India.now this is going to join hands with another poor company and make life more miserable for the customers.anyhow now people struggle to connect calls over aircel network, next they will have only no signal situation.and the cherry over icing would be the undue balance deduction policy applied by Mr Angelo.KILLER PARTNERSHIP!!!

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