New Delhi [India], Sept. 14 : India's leading fully-integrated nationwide telecommunications service provider Reliance Communications and Maxis Communications Berhad, the promoters of Aircel Limited, today announced the signing of definitive documents for the merger of their Indian wireless businesses - the largest-ever consolidation in the Indian telecom sector.
The RCOM-Aircel combination will create a strong operator clearly ranked amongst India's top four telcos by customer base and revenues, also ranking amongst the top three operators by revenues in 12 important circles.
Both companies will hold 50 percent stake each in the combined entity and will transfer debt worth Rs.
14,000 crore each. The entity will be listed at a later date. The combined entity will also have net worth of Rs. 35,000 crore and debt of Rs. 28,000 crore. In terms of subscribers, a Rel Comm-Aircel combine will be the country's second largest telecoms player, with 19 crore users.
Airtel (25 crore), Vodafone (19.8 crore) and Idea (17.5 crore) will comprise the top four players. However, in revenue market share, the combined business will trail Idea with 10 percent share compared with Idea's 20.1 percent.
Airtel and Vodafone will have revenue market share of 31.6 percent and 22.6 percent. "Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the Indian telecom sector, first, with RCOM's acquisition of the wireless business of SSTL, and now, with the combination of our business with Aircel Ltd.
in a 50:50 Joint Venture with MCB," said Chairman Reliance Group, Anil D. Ambani. "We expect this combination to create substantial long term value for shareholders of both, RCOM and MCB, given the benefits of the wide-ranging spectrum portfolio and significant revenue and cost synergies," added Anil.
"This deal further reinforces MCB's commitment to India. Since acquiring Aircel in 2006, MCB has invested in excess of Rs. 35,000 crore (USD 5.2 billion) into Aircel, making this one of the largest foreign investments into India, not only in the telecom industry but across all sectors.
The magnitude of this investment, and the further equity commitment in support of this deal, are underpinned by MCB's belief in the long term growth potential of both India and the Indian telecom sector," said Maxis Communications Berhad.