RCom Shuts Wireless Business But Completes MTS Merger

Reliance Communications or RCom on Tuesday announced the completion of the merger deal with Sistema Shyam Teleservices (SSTL). SSTL operated under MTS brand name and was not a Pan-India operator. The proposed RCom-MTS merger was first announced in November 2015.

The closure deal was recorded on 31 October 2017, the company said in a filing to the stock exchanges in India.  Earlier last week, RCom had said the merger would close in first week of November.

The RCom MTS merger had cleared the final hurdle, an approval from DoT, on 23 October which leaves the closure of the merger as mere an announcement. The firm has already received all other approvals from the concerned authorities like stock exchange, Courts and CCI etc in the last two years time.

As per the merger deals, RCom would acquire the Russia-India JV operator in an all-stock deal while SSTL would get 10% stake in RCom. All pending payments, like annual spectrum fees amounting to Rs 390 crore per annum for the next 8 years, will now be paid by RCom. However, SSTL has to pay off all its debts before the closure of the deal.

In terms of assets, RCom will now get approximately 2 million customers and additional annual revenues of around Rs 700 crore. In addition, the Anil Ambani-led firm 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.

This will result in extension of the validity of RCom’s spectrum portfolio in the 800 / 850 MHz band in eight important Circles (Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP-West and West Bengal) by a period of 12 years—from 2021 to 2033.

While the RCom-MTS merger closed, the Anil Ambani-led firm is shutting down its wireless business and is closing its 2G and 3G business. The wireless services would end on 30 November, exactly after a month.

RCom has more than 75 million customers and while these customers are facing a service blackout from December onward, operators like Bharti Airtel have started wooing them with lucrative service offerings.

Read : Why Airtel Could Be The Best Option For RCom Customers

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