Indian telecom operator Reliance Communications (RCom) has announced that it has completed the merger with Sistema Shyam Teleservices (SSTL) telecom business in India. You probably know SSTL which run its telecom business in India under the brand name MTS India.
As part of the merger, RCom will acquire 30 MHz in the 800/850 MHz band. This will eventually help RCom in extending the validity of its spectrum spread across eight telecom circles by a period of 12 years (from 2021 to 2033). The telecom circle includes Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP-West and West Bengal. This spectrum band is well suited for 4G LTE services and other evolving technologies.
On the other hand, SSTL will now own a 10 percent equity stake in RCom following a new share issue of the Indian operator. RCom will still need to pay the liabilities to DoT, for SSTL’s spectrum, amounting to Rs 390 crore per annum for the next 8 years.
“We welcome the completion of this deal, which marks another chapter in consolidation of the Indian telecom sector. As a shareholder of RCom we are confident that this merger will help strengthen the operator’s position in the industry and deliver on its strategic plans,” said Sistema President Mikhail Shamolin.
Both DoT and courts of India confirm that SSTL’s spectrum can be used for deployment of the 4th generation networks without any additional payment.
However, the merger seems to have a little impact on RCom’s business. As earlier this week, the telco has come up with a comprehensive debt repayment plan. This includes the telco raising up to 17,000 crore rupees through the sale of its assets.