Comments
Debt-laden Reliance Communications (RCom), a company controlled by billionaire Anil Ambani, has completed merger of Sistema Shyam Teleservices Ltd’s (SSTL) telecom business with itself.
Following the merger, SSTL has received a 10 per cent stake in RCom, while RCom has assumed SSTL’s spectrum liabilities of ₹ 390 crore per annum for the next 8 years. These liabilities are payable to the Department of Telecommunications in installments, RCom said in a statement.
RCom has acquired SSTL’s telecommunications business, including its licences, spectrum and 4 million customers (majority of them are data-only customers). RCom will get 30 MHz of SSTL’s 800/850 MHz band spectrum, which is suited for 4G LTE services and other evolving technologies, it said in a statement.
The acquisition will also result in extension of RCom’s spectrum validity in the 800/850 MHz across eight circles by 12 years to 2033 from 2021. These circles are Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, Uttar Pradesh (West) and West Bengal, RCom said in a statement.
RCom’s spectrum value would also increase by ₹ 7,400 crore calculated on the basis of the latest auction prices.
In November 2015, Russia’s public diversified holding company Sistema had announced plans to merge its Indian telecom subsidiary SSTL into RCom. SSTL, a joint venture between Russia’s Sistema and India’s Shyam Group, was providing telecom services under the brand name MTS.
At its AGM on September 26, Reliance Group Chairman Anil Ambani told shareholders that a “frivolous” petition filed by a shareholder has resulted in delaying the RCom-SSTL by nearly a year.
Ambani was referring to the petition filed by a minority shareholder, Shailesh Mehta, who had objected to the merger stating shareholders’ interest may be impacted. Mehta has 10 shares in RCom.
RCom had earlier announced plans of shutting down its 2G mobile services from November 30, with subscribers given the option to either shift to its 3G or 4G network or port out to another operator.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.