MUMBAI:Reliance Communications, a part of the Anil Dhirubhai Ambani group, is in discussions for a potential merger of Indian telecom business of Sistema Shyam TeleServices with itself. The likely merger will be through a share swap.
“The discussions are indicative and non-binding in nature, and remain subject to due diligence, definitive documentation and approvals, as may be necessary,’’ Reliance Communication said in a communication to the stock exchanges.
“There is no certainty that any transaction will result (from the discussions).’’
The country today has just five all-India private sector players in the telecom sector, compared with 11 before 2012. These five players account for 85 per cent of the revenue market share. Reliance Communication expects the data traffic to grow 7.5 times between 2014 and fiscal 2018, and the number of smart-phones to increase to 336 million in 2018 from 116 million in 2014.
Reliance Communication has 109 million wireless subscribers, including 34 million data subscribers. The company has presence across wireless, enterprise, broadband, passive infrastructure and DTH, and also has undersea cable of 68,698 km for global data communications.
Sistema Shyam TeleServices Ltd (SSTL), is a joint venture of Sistema Joint Stock Financial Corp of Russia (JSFC) and the Shyam Group of India. The Sistema JSFC is a majority shareholder in the company, with 56 per cent shareholding, while Russian government owns 17 per cent and Shyam group 24 per cent, and 3 per cent some minority shareholders.
The company provides telecom services under the MTS brand to more than 10 million wireless subscribers across 9 circles, which includes one million high speed mobile broadband customers. It has invested $3.6 billion in expanding its telecom network across the country. Besides India, MTS also provides services in Russia, Ukraine, Armenia, Uzbekistan and Turkmenistan.
Sistema Shyam TeleServices declined comment citing the process of due diligence that bars it from sharing any details, while Reliance Communication spokesman didn’t pick up the phone.
