R-Com deal gets green signal
The department of telecom (DoT) has cleared the merger of Sistema Shyam Teleservices with Reliance Communications, a deal that will reduce the number of mobile operators in the country to ten.
- Published 24.10.17
New Delhi: The department of telecom (DoT) has cleared the merger of Sistema Shyam Teleservices with Reliance Communications, a deal that will reduce the number of mobile operators in the country to ten.
"Reliance Communications Limited (R-Com) has received the DoT's approval for the demerger of the wireless business of Sistema Shyam Teleservices Limited (SSTL) into R-Com," the Anil-Ambani led telecom company said in a statement on Monday.
According to a source, the deal was cleared by the DoT on October 20.
Under the deal, all the wireless business assets of SSTL will come under R-Com. However, brand MTS will continue to operate. SSTL will get a 10 per cent stake in R-Com under the terms of the agreement.
"With this, R-Com will acquire approximately 2 million customers and additional annual revenues of around Rs 700 crore. In addition, R-Com will acquire 30 MHz of the most valuable and superior 800/850 MHz band spectrum, ideally suited for 4G LTE services, to complement its own unique nationwide footprint," the statement said. PTI
The DoT nod will offer some relief to debt-ridden R-Com after its merger with Aircel collapsed early this month.
The merger of SSTL will also extend the validity of R-Com's spectrum portfolio in the 800 and 850 MHz bands in eight key circles - Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Calcutta, UP-West and Bengal - by a period of 12 years, from 2021 to 2033.
R-Com has assumed the liability to pay Rs 390 crore per annum for the next eight years to the DoT which is due for spectrum purchased by SSTL.
The transactions related to the deal are expected to close by the first week of November 2017, R-Com said.
Shares of Reliance Communications on Monday closed at Rs 17.7 , up 7.6 per cent compared with the previous close on the Bombay Stock Exchange.