Reliance and Aircel to form fourth largest telecom operator together
Q. Which company is merging its wireless business with Aircel to form the fourth largest telecom operator in the country?- Published on 16 Sep 16a. Reliance Communications
b. Tata Communications
c. AIRTEL
d. Vodafone
ANSWER: Reliance Communications
Anil Ambani’s Reliance Communication and Maxis Communications Berhad/MCB promoters of Aircel on 14th September 2016 agreed to merge their wireless business.
- They will form the fourth largest telecom operator in the country
- Merger is termed the biggest consolidation deal in Indian telecom sector
- R-Com will demerge its wireless business and transfer it to the new entity
- Standlone business will focus on enterprise segment and data centre businesses
- Sistema will hold 10 percent in standalone R-Com
- Both R-Com and Maxis will hold 50 percent each in the new entity
- Merged company will be one of India’s largest private sector companies with an asset base of INR 65,000 crore rupees and net worth of INR 35000 crore rupees
- Entity will enjoy benefits of scale driving revenue growth and capex as well as open synergies with net present value of INR 20,000 crore rupees
- Company will be managed by an independent professional team under the board’s supervision
- Following completion of the merger in 2017, R-Com’s overall debt will reduce by INR 20000 or over 40 percent of its debt
- Aircel’s debt will reduce by INR 4000 crore
- Entity will have the second largest spectrum holding among all operators, aggregating 448 Mhz across 850, 900, 1800 and 2100 MHz bands
- It will benefit from enhanced business continuity through an extended validity of spectrum holdings till 2033-2035
