Anil Ambani-led Reliance Communications and Maxis Communications Berhad (MCB), promoters of Aircel, on 14 September 2016 agreed to merge their wireless businesses to form the fourth-largest telecom operator in the country.
The merger is termed as the biggest consolidation deal in India's telecom sector.
Key highlights of the merger
• R-Com will demerge its wireless business and transfer it to the new entity. Its standalone business will focus on the enterprise segment and data centre businesses.
• Sistema will continue to hold 10 per cent in standalone R-Com.
• Both R-Com and Maxis will hold 50 per cent each in the new entity.
• The merged company will be one of India’s largest private sector companies. It will have an asset base of over 65000 crore rupees and net worth of 35000 crore rupees.
• The entity will enjoy substantial benefits of scale driving significant revenue growth, and capex and opex synergies with a net present value of 20000 crore rupees.
• The company will be managed by an independent professional team under the supervision of the board.
• After completion of the merger in 2017, RCom’s overall debt will reduce by 20000 crore rupees or over 40 per cent of its debt.
• Aircel’s debt will reduce by 4000 crore rupees.
• The entity will have the second-largest spectrum holding amongst all operators, aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands.
• It will enjoy enhanced business continuity through extended validity of spectrum holdings till 2033-35.
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What: To be merged