1. Reliance Jio impact: After Idea, Vodafone merger, 3 more M&A deals coming, says industry

Reliance Jio impact: After Idea, Vodafone merger, 3 more M&A deals coming, says industry

The arrival of Reliance Jio Infocomm has seen a spate of merger and acqusitions in the telecom space with several small telecom players either going for outright sale or exiting by just selling off their spectrum once the spectrum trading guidelines were formalised.

By: | New Delhi | Updated: March 21, 2017 6:24 AM
In addition, RCom will assume the liability to pay the government installments for SSTL’s spectrum, amounting to R392 crore per annum for the next 10 years.

The arrival of Reliance Jio Infocomm has seen a spate of merger and acqusitions in the telecom space with several small telecom players either going for outright sale or exiting by just selling off their spectrum once the spectrum trading guidelines were formalised.

Wednesday’s announcement of the merger of the country’s second and third largest operators – Vodafone India and Idea Cellular – is the fourth such development in the market in recent times. The M&A spree started with Reliance Communication (RCoM) in June 2016 announcing the take over of Russian conglomerate Sistema’s Indian mobile telephony venture that operates under the MTS brand. Under the deal, Sistema Shyam Teleservices (SSTL) will hold a 10% equity stake in RCom.

In addition, RCom will assume the liability to pay the government installments for SSTL’s spectrum, amounting to R392 crore per annum for the next 10 years.Then in September RCoM and Malaysia-based Maxis Berhard-owned Aircel announced merger talks of their wireless operations to create a combined entity with assets worth R65,000 crore.

Once through, it will help trim RCoM’s overall debt by R20,000 crore and that of Aircel by R4,000 crore. The merged company will also have a total subscriber count of more than 177 million.

Last month, the country’s largest telecom operator Bharti Airtel announced the acquisition of the Indian operations of Norwegian firm Telenor in which Bharti will acquire Telenor India’s operations in seven circles — Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.

Telenor India’s acquisition, propelled by the September 2016 launch of Jio that has impacted the profits and margins of the firms, will add 44 million subscribers to Bharti’s user base of 269 million as well as add 43.4 MHz of 1800 MHz spectrum to the telecom major’s spectrum holdings.

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