"Reliance Communications Ltd has received an approval of the Competition Commission of India (CCI) for the proposed Scheme of Arrangement for demerger of the Wireless division of the company into Aircel Ltd and Dishnet Wireless Ltd," the company said in a regulatory filing.
Reliance Communications and Aircel in September last year announced the merger of their wireless operations to create a combined entity with assets worth Rs 65,000 crore.
"Post closing, the company and the present shareholders of Aircel Ltd will hold 50 per cent each in Aircel Ltd," Reliance Communication said.
The transaction will reduce RCom's debt by Rs 20,000 crore (USD 3 billion), while Aircel's debt would go down by Rs 4,000 crore (USD 600 million) on closing in 2017, the two companies had said last year.
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RCom, in September last year, announced it will merge its wireless telecom business with smaller rival Aircel to create what will be the country's 3rd-biggest mobile phone operator, with asset base of more than Rs 65,000 crore and net worth of Rs 35,000 crore.
Post closing of the deal, RCom and the present shareholders of Aircel Ltd (Maxis Communications Berhad) will hold 50 per cent each in the merged entity, with equal representation on the board and committees.
The Competition Commission of India's nod to RCom and Aircel merger comes amid a massive consolidation drive in the telecom sector, intensified by the disruptive entry of newcomer Reliance Jio.
Earlier today the board of Idea Cellular approved its amalgamation with telecom operator Vodafone India and Vodafone Mobile Services, to create the country's largest telecom service provider.