Bengaluru: ADAG Group chairman Anil Ambani addresses during the inauguration of the `Invest Karnataka 2016` Global Investors Meet in Bengaluru on Feb. 3, 2016. (Photo: IANS)
New Delhi, Feb 22 (IANS) India's anti-trust watchdog has approved the merger of Sistema Shyam's telecom venture with Reliance Communications in a deal valued at Rs.5,000 crore ($730 million, involving both a stock-swap and payment towards spectrum.
"Further to our letter dated January 14, 2016, we wish to inform you that Competition Commission of India (CCI) has approved the transfer of telecommunications undertaking of Sistema Shyam Teleservices Ltd to the company," Reliance Communications (RCom) said in a regulatory filing.
One of the most significant aspects of the deal is that Reliance Communications will have a licence for spectrum across 22 circles for a minimum of 15 years for the 4G services, stretching up to 20 years in some circles, a source involved with the deal said.
Sistema currently operates in India under the MTS brand.
"Actually, if we consider the fact that RCom won't have to pay for new spectrum for eight circles where the licence is expiring in the near future, the deal size works out to Rs.15,000 crore -- the company won't have to buy spectrum till 2021 now," the source said.
"Only instalments for what has been purchased in the 2013 auctions to be paid -- around Rs.400 crore a year for 10 years," said the source, adding this will give the company's customers flexibility to migrate to 4G while sharing spectrum in 800/850 MHz with Reliance Jio.
Industrialist Anil Ambani-led RCom has also initiated talks with the promoters of Aircel -- the majority owner Malaysia's Maxis Communications and Sindya Securities and Investments -- for a potential merger.
Once this deal also goes through, RCom-Sistema-Aircel combined will have more than 150 million customers in India, with close to 20 percent of the total spectrum -- highest in the country -- in virtually every band currently available to private players.
This apart, RCom also announced last month that it has paid Rs.5,383.84 crore to the government as fee towards spectrum sharing and trading in 16 circles for the 800-850 MHz band. This followed a pact on this with Jio for nine service areas.
Based on the existing plan, RCom will pursue spectrum trading in nine circles with Jio and share this scarce airwaves in 17 circles. Eventually the sharing will cover all 22 circles in the 800 MHz band.
This website uses cookies.