RCom and Aircel in talks to create second-biggest mobile operator Tuesday Dec 22,2015

Anil Ambani-led Reliance Communications (RCom) has initiated talks with shareholders of telecom operator Aircel for a merger of their mobile businesses. 

If the merger takes place, it will create the country’s second-biggest mobile phone operator by user numbers. 

According to an RCom statement issued on Tuesday, the company has entered into a 90-day exclusivity period with Maxis Communications Berhad (MCB) and Sindya Securities and Investments Private Limited, the shareholders of Aircel Limited, to consider a potential combination of the Indian wireless businesses of RCom and Aircel. 

RCom is India’s fourth-biggest telecom operator with almost 110 million customers, while Aircel ranks fifth with 84 million subscribers. 

A merger with Aircel together with buying Russian firm AFK Sistema’s Indian wireless unit, as announced last month, could nearly double RCom’s number of subscribers to more than 200 million. Sistema had 8.36 million users

The merged entity will be created through equity deal where RCom’s shareholders are looking for three shares against each held by them. 

The combination of RCom, Aircel, and MTS wireless businesses will hold 19.3 per cent of the total spectrum allocated to the industry - the highest in the country by an entity. 

The new entity will hold spectrum across all allocated bands - 800 Mhz, 900 Mhz, 1,800 MHz, 2,100 MHz and 2,300 MHz - for 2G, 3G and 4G services.