scorpionking76
EntMnt Knight
Reliance Communications says it is in talks with Aircel to merge their wireless businesses
RCom Reliance and Aircel to merge wireless business
- Thread starter scorpionking76
- Start date
Technoglitch
Core Member
only the data?
adithya
Core Member
A three-way combination involving telecom operators Reliance Communications, Sistema Shyam Teleservices and Aircel would have an 3G footprint that's bigger than those of Vodafone and Idea Cellular and a likely 4G presence in eight circles, although a heavy debt burden could cripple the deal, analysts said.
Anil Ambani-controlled RCom and Aircel announced exclusive 90-day merger talks on Tuesday to combine their wireless businesses under a newly listed Rs 35,000 crore entity, barely a month after RCom, India's fourth-largest carrier, and the Indian unit of Russia's Sistema JSFC announced an all-stock merger.
"A combined entity could offer 3G services in 18 circles, launch 4G services on the 2300 MHz band in eight circles and hold 2G spectrum in 22 circles," Goldman Sachs said in a note to clients. Vodafone offers services in 16 circles and No. 3 carrier Idea Cellular is present in 13.
The US brokerage noted that the potential combine would "breach overall spectrum caps in Tamil Nadu, West Bengal and Jammu & Kashmir. Operators are not allowed to hold more than 25% of the total spectrum in a circle. People familiar with the matter said the new entity may surrender excess airwaves.
Brokerage IDFC said the combined wireless operations of "RCom, Sistema Shyam and Aircel would have a formidable 12 per cent revenue market share, but the debt burden of both RCom (Rs 39,900 crore) and Aircel (Rs 20k-to-24k crore range) could be a possible deal breaker."
As per CLSA, market leader Bharti Airtel had a 31% revenue share at the end of September, No. 2 Vodafone was at 23% and Idea at 19%. RCom had a 5% share and Aircel 6%, too far behind to pose a serious challenge to any of the top carriers.
An RCom-Aircel combine would be saddled with Rs 35,000 crore of debt, which analysts indicated may require Rs 3,500 crore of free cash to service, even though RCom has said the loans were taken at below 7% interest. However, sources said RCom and Aircel would each transfer about Rs 10,000 crore of debt to the combined entity, with revenue pegged at about Rs 25,000 crore and earnings before interest, tax, depreciation and amortisation at Rs 6,000-7,000 crore.
According to IDFC, consummation of a deal by RCom to sell its towers and optic fibre assets would eventually hold the key. Earlier this month, RCom signed a non-binding agreement to sell its telecom towers to Sanjiv Ahuja-led Tillman Global Holdings and private equity buyout group TPG in a move aimed at reducing debt. It is also looking at selling its 190,000 km optic fibre network to further cut debt and the Tillman Global-TPG combine is evaluating a possible purchase. Both deals combined could net RCom some Rs 30,000 crore.
Analysts at IDFC also said that "managing a three-way merger" along with RCom's global and other wireless operations would be a complex affair, which could be further shackled by the "ongoing CBI probe on the Aircel-Maxis deal".
source:-
RCom, Aircel, SSTL merger may create strong number 4 - Times of India
RCom, Aircel, SSTL merger likely to create strong number 4 after Airtel,Vodafone, Idea | Business Insider India
Anil Ambani-controlled RCom and Aircel announced exclusive 90-day merger talks on Tuesday to combine their wireless businesses under a newly listed Rs 35,000 crore entity, barely a month after RCom, India's fourth-largest carrier, and the Indian unit of Russia's Sistema JSFC announced an all-stock merger.
"A combined entity could offer 3G services in 18 circles, launch 4G services on the 2300 MHz band in eight circles and hold 2G spectrum in 22 circles," Goldman Sachs said in a note to clients. Vodafone offers services in 16 circles and No. 3 carrier Idea Cellular is present in 13.
The US brokerage noted that the potential combine would "breach overall spectrum caps in Tamil Nadu, West Bengal and Jammu & Kashmir. Operators are not allowed to hold more than 25% of the total spectrum in a circle. People familiar with the matter said the new entity may surrender excess airwaves.
Brokerage IDFC said the combined wireless operations of "RCom, Sistema Shyam and Aircel would have a formidable 12 per cent revenue market share, but the debt burden of both RCom (Rs 39,900 crore) and Aircel (Rs 20k-to-24k crore range) could be a possible deal breaker."
As per CLSA, market leader Bharti Airtel had a 31% revenue share at the end of September, No. 2 Vodafone was at 23% and Idea at 19%. RCom had a 5% share and Aircel 6%, too far behind to pose a serious challenge to any of the top carriers.
An RCom-Aircel combine would be saddled with Rs 35,000 crore of debt, which analysts indicated may require Rs 3,500 crore of free cash to service, even though RCom has said the loans were taken at below 7% interest. However, sources said RCom and Aircel would each transfer about Rs 10,000 crore of debt to the combined entity, with revenue pegged at about Rs 25,000 crore and earnings before interest, tax, depreciation and amortisation at Rs 6,000-7,000 crore.
According to IDFC, consummation of a deal by RCom to sell its towers and optic fibre assets would eventually hold the key. Earlier this month, RCom signed a non-binding agreement to sell its telecom towers to Sanjiv Ahuja-led Tillman Global Holdings and private equity buyout group TPG in a move aimed at reducing debt. It is also looking at selling its 190,000 km optic fibre network to further cut debt and the Tillman Global-TPG combine is evaluating a possible purchase. Both deals combined could net RCom some Rs 30,000 crore.
Analysts at IDFC also said that "managing a three-way merger" along with RCom's global and other wireless operations would be a complex affair, which could be further shackled by the "ongoing CBI probe on the Aircel-Maxis deal".
source:-
RCom, Aircel, SSTL merger may create strong number 4 - Times of India
RCom, Aircel, SSTL merger likely to create strong number 4 after Airtel,Vodafone, Idea | Business Insider India
IndianMascot
Core Member
This will be the biggest merger ever happened in Telecom.
IndianMascot
Core Member
RCOM becoming bigger once again. But do they have caliber to survive. They are already debt ridden.
adithya
Core Member
Ironically, the biggest beneficiary of the three-way planned merger between Reliance Communications, MTS India and Aircel is likely to be Reliance Jio.
The anticipated merger will give birth to a new telco with more than 200 million subscribers taking it ahead of Vodafone India and Idea Cellular. Further, the combined entity will hold nearly 20 per cent of all spectrum across frequency bands of 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz, placing it in an ideal position to offer mobile services across technologies — 2G to 4G.
What is of significance here is Anil Ambani’s RCom’s growing affinity with brother Mukesh’s RJio. In 2005, the two decided to assist each other in their telecom ventures. The two companies already have a passive infrastructure arrangement and are close to signing spectrum sharing agreement.
“This strategic cooperation and partnership between RJio and RCom is a virtual consolidation in the telecom sector and I’m grateful to my elder brother Mukeshbhai for unstinted support and guidance,” Anil Ambani said at the last annual general meeting.
The agreement would further facilitate RCom customers to access RJio’s 4G network on an “asset light” and “minimum capital expenditure”.
RJio, on the other hand, would get a ready subscriber base of millions, second only to Bharti Airtel, India’s largest service provider. This merger would be hugely beneficial to RJio since a key problem for it was access to subscribers and how to churn high data users from their existing service providers. And since both MTS and RCom have roots in CDMA, they would have a good percentage of high data spenders, who would easily move to RJio. CDMA technology is believed to be more efficient for data transmission.
“It is definitely positive for RJio as it will get access to a huge subscriber base,” says Deepak Kumar, founder analyst, BusinessandMarkets.
However, it is not going to be easy since RJio is marketing Voice Over LTE (VoLTE) as ‘true 4G’ while incumbent telcos are focusing on just 4G. VoLTE is believed to offer enhanced quality of service to subscribers, but requires users to use VoLTE device. So RJio needs to offer VoLTE devices at value proposition to subscribers.
If RJio really needs to leverage this access to subscriber base, it would need to use a Circuit Switched Fall Back like incumbents. However, it loses its differentiating factor if it does so.
Whatever be the case, the merged entity will be a big arsenal in RJio’s game plan to dominate the country’s 4G and data ecosystem.
source:-
How RCom Aircel MTS Merger Benefits RJio-Gagandeep Kaur - BW Businessworld
The anticipated merger will give birth to a new telco with more than 200 million subscribers taking it ahead of Vodafone India and Idea Cellular. Further, the combined entity will hold nearly 20 per cent of all spectrum across frequency bands of 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz, placing it in an ideal position to offer mobile services across technologies — 2G to 4G.
What is of significance here is Anil Ambani’s RCom’s growing affinity with brother Mukesh’s RJio. In 2005, the two decided to assist each other in their telecom ventures. The two companies already have a passive infrastructure arrangement and are close to signing spectrum sharing agreement.
“This strategic cooperation and partnership between RJio and RCom is a virtual consolidation in the telecom sector and I’m grateful to my elder brother Mukeshbhai for unstinted support and guidance,” Anil Ambani said at the last annual general meeting.
The agreement would further facilitate RCom customers to access RJio’s 4G network on an “asset light” and “minimum capital expenditure”.
RJio, on the other hand, would get a ready subscriber base of millions, second only to Bharti Airtel, India’s largest service provider. This merger would be hugely beneficial to RJio since a key problem for it was access to subscribers and how to churn high data users from their existing service providers. And since both MTS and RCom have roots in CDMA, they would have a good percentage of high data spenders, who would easily move to RJio. CDMA technology is believed to be more efficient for data transmission.
“It is definitely positive for RJio as it will get access to a huge subscriber base,” says Deepak Kumar, founder analyst, BusinessandMarkets.
However, it is not going to be easy since RJio is marketing Voice Over LTE (VoLTE) as ‘true 4G’ while incumbent telcos are focusing on just 4G. VoLTE is believed to offer enhanced quality of service to subscribers, but requires users to use VoLTE device. So RJio needs to offer VoLTE devices at value proposition to subscribers.
If RJio really needs to leverage this access to subscriber base, it would need to use a Circuit Switched Fall Back like incumbents. However, it loses its differentiating factor if it does so.
Whatever be the case, the merged entity will be a big arsenal in RJio’s game plan to dominate the country’s 4G and data ecosystem.
source:-
How RCom Aircel MTS Merger Benefits RJio-Gagandeep Kaur - BW Businessworld
scorpionking76
EntMnt Knight
I guess this is already shared
IndianMascot
Core Member
Yes. That's why merged it with existing thread although I remember there was one more thread but couldn't trace it.