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.