 "A man opens the shutter of a shop painted with an advertisement of Reliance Communications in Mumbai")
Reliance Communications (RCom) has received approval from Competition Commission of India (CCI) to acquire Russian conglomerate Sistema's Indian telecom unit, Sistema Shyam Teleservices Ltd (SSTL). SSTL operates under the MTS brand across nine telecom circles of the 22 in the country.
“We wish to inform you that CCI has approved the transfer of telecommunications undertaking of SSTL to the company,” Reliance Communications said.
RCom had in November last year announced the acquisition of Sistema’s unit, in an all-stock deal that will create an operator with 118 million subscribers.
SSTL will hold about 10 per cent stake in RCom and pay off its existing debt before closing the deal.
Sistema currently holds 56.7 per cent stake in SSTL, while the Russian government owns 17.1 per cent.
Shyam Group has a 24 per cent stake and the rest is owned by small investors.
The deal will give RCom access to spectrum or airwaves in the 850 MHz band that can be used for fourth generation (4G) services, which it plans to start by the year-end. RCom will also be able to extend the validity of its licence by 12 years in eight high revenue-generating circles — Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, Uttar Pradesh (West), and West Bengal.
While SSTL will pay off its existing debt, RCom will assume the liability to pay the government instalments for SSTL’s spectrum, amounting to Rs 392 crore a year for the next 10 years.
THE DEAL
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According to the deal, SSTL will hold about 10% stake in RCom and pay off its existing debt before closing the deal
- It will give RCom access to spectrum or airwaves in the 850-MHz band that can be used for 4G services
