Industry News

R-Com and Aircel Merger to be Completed by July 2016

India: Reliance Communications Ltd. signed agreement with Aircel Ltd. to merge their mobile business units. The new telecom firm formed as a result of the merger activity would be jointly hold by Reliance Communications and Aircel (50:50), and would operate with a new brand name. The deal is estimated to be complete by end of July, 2016. The total deal amount is of USD 6 Billion.

As a part of the deal, Reliance Communications would spin-off its mobile business unit to merge with the mobile business of Maxis-owned Aircel. Moreover, both the companies would transfer USD 2.09 Billion debt to the new entity.

In December 2015, Reliance Communications signed a non-binding agreement with Tillman Global Holdings LLC and TPG Asia Inc. to sell all its telecom towers and optic fiber assets. The merger of R-Com and Aircel would play pivotal role in the tower deal, as it would make the tower deal more attractive considering new tower opportunities with increased tenancies.

TechSci Research analyses that the merged entity, which would be India’s third-largest telecom firm by subscribers, would impact the growth of 4G LTE services with increasing penetration and rapid adoption of 4G services in India.

According to the recent report published by TechSci Research, “Global LTE Consumer Devices Market Forecast and Opportunities, 2020”, global market for LTE consumer devices is projected to grow at a CAGR over 26% through 2020. Rising adoption of LTE technology in India and other emerging economies across world, rising number of LTE enabled registered devices, such as cameras and other wearable devices coupled with anticipated decline in average selling prices of LTE devices, globally would fuel the LTE market in the coming years, globally.

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