RCom Says Strategic Transformation Enters Final Stage, MTS Deal to Be Completed by June

Reliance Communications (RCom) said that its strategic company transformation has now entered final stages of the competition with proposed acquisition of Sistema Shyam TeleServices wireless. The proposed purchase of SSTL’s wireless operations has received all approvals and is expected to be completed in June 2017.

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RCom said that the SSTL merger will add highly valuable 30 MHz of 850 band spectrum in 8 key circles, and will extend the validity of spectrum in these circles for an additional period of 12 years, till 2033.

RCom had launched a comprehensive programme of all-round strategic transformation in the year 2015, with emphasis on industry consolidation, an asset-light business model, future sustainability, and cost efficiencies.

As part of the program, RCom had inked spectrum sharing and trading deal with Reliance Jio for 850 Mhz spectrum. The arrangements with Jio have been fully implemented, and are now operational for the past over six months. The company said that the agreement had enabled RCom to deliver access and connectivity to a nationwide 4G LTE network to millions of valued customers, with minimal CAPEX and considerably lower operating costs.

Under its transformation drive, RCom is also merging its wireless business with Aircel: The proposed consolidation of RCom’s wireless business with Aircel will place the combined wireless entity among the top 3 ranking operators in 12 important circles, and among the major four operators in India by customer base and revenues.

The combined RCom-Aircel entity will enjoy substantial benefits of scale, and CAPEX and OPEX synergies with an estimated NPV of Rs. 20,000 crore. As part of this transaction, RCom’s overall debt will reduce by Rs 14,000 crore, together with the transfer of liability for spectrum instalments of an additional approx. Rs. 6,000 crore.