The Bombay High Court has admitted an application seeking a merger between Reliance Communications (RCom) and Sistema Shyam Teleservices, the telecom unit of Russia's Sistema JSFC. The court has asked RCom to convene a meeting of shareholders on March 8, the Anil Ambani-run company said in a release on Monday. RCom plans the merger with Sistema, which operates the only CDMA network in the country, as the first of a series of consolidation exercises.
The transaction will add high data users to RCom's client base and give the company sufficient airwaves to move its CDMA customers and free up existing airwaves for trading. RCom recently paid the Department of Telecommunications Rs 5,384 crore to liberalise airwaves it is currently using for CDMA so that it can trade them with Reliance Jio Infocomm.
The airwaves can be used for 4G LTE technology more effectively than those operators have at the moment, because they are in the 800MHz band, which travels farther than higher frequencies.
RCom had previously announced plans to merge SSTL with itself with the latter's shareholders getting a 10% stake in the combined entity. After this transaction, RCom plans to sell its telecom tower business, lower debt and thereafter merge with Aircel.
The transaction will add high data users to RCom's client base and give the company sufficient airwaves to move its CDMA customers and free up existing airwaves for trading. RCom recently paid the Department of Telecommunications Rs 5,384 crore to liberalise airwaves it is currently using for CDMA so that it can trade them with Reliance Jio Infocomm.
The airwaves can be used for 4G LTE technology more effectively than those operators have at the moment, because they are in the 800MHz band, which travels farther than higher frequencies.
RCom had previously announced plans to merge SSTL with itself with the latter's shareholders getting a 10% stake in the combined entity. After this transaction, RCom plans to sell its telecom tower business, lower debt and thereafter merge with Aircel.
Sandip Ginodia , Director
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