RCOM, Aircel and Sistema to Work in Merger

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Reliance Communication, Aircel and MTS have started initial talks for the three-way merger. In an initial stage MTS  and Aircel could share airwaves with RCOM. At last count, Aircel’s debt stood at around Rs 20,000 crore while RCom reported net debt of Rs 38,595 crore. Aircel and RCom have operating profits of Rs 2,500 crore and over Rs 7,500 crore, respectively. Excluding the enterprise, undersea cable and tower businesses, RCom’s EBITDA (earnings before interest tax, depreciation and amortisation) from the mobility business is estimated to be Rs 3,000-3,500 crore.

The two companies already have infrastructure-sharing pacts which enable users to interchangeably use their networks. These pacts have also resulted in mutually opportunistic laying of networks and telecom tower footprint, which would mean a lesser effort to reduce duplication. Read more

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Sweekar S

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