A three-way combination involving telecom operators Reliance Communications, Sistema Shyam Teleservices and Aircel would have an 3G footprint that's bigger than those of Vodafone and Idea Cellular and a likely 4G presence in eight circles, although a heavy debt burden could cripple the deal, analysts said.
Anil Ambani-controlled RCom and Aircel announced exclusive 90-day merger talks on Tuesday to combine their wireless businesses under a newly listed Rs 35,000 crore entity, barely a month after RCom, India's fourth-largest carrier, and the Indian unit of Russia's Sistema JSFC announced an all-stock merger.
"A combined entity could offer 3G services in 18 circles, launch 4G services on the 2300 MHz band in eight circles and hold 2G spectrum in 22 circles," Goldman Sachs said in a note to clients. Vodafone offers services in 16 circles and No. 3 carrier Idea Cellular is present in 13.
The US brokerage noted that the potential combine would "breach overall spectrum caps in Tamil Nadu, West Bengal and Jammu & Kashmir. Operators are not allowed to hold more than 25% of the total spectrum in a circle. People familiar with the matter said the new entity may surrender excess airwaves.
Brokerage IDFC said the combined wireless operations of "RCom, Sistema Shyam and Aircel would have a formidable 12 per cent revenue market share, but the debt burden of both RCom (Rs 39,900 crore) and Aircel (Rs 20k-to-24k crore range) could be a possible deal breaker."
Thursday, December 24, 2015
RCom, Aircel, SSTL merger may create strong number 4
A three-way combination involving telecom operators Reliance Communications, Sistema Shyam Teleservices and Aircel would have an 3G footprint that's bigger than those of Vodafone and Idea Cellular and a likely 4G presence in eight circles, although a heavy debt burden could cripple the deal, analysts said.
Anil Ambani-controlled RCom and Aircel announced exclusive 90-day merger talks on Tuesday to combine their wireless businesses under a newly listed Rs 35,000 crore entity, barely a month after RCom, India's fourth-largest carrier, and the Indian unit of Russia's Sistema JSFC announced an all-stock merger.
"A combined entity could offer 3G services in 18 circles, launch 4G services on the 2300 MHz band in eight circles and hold 2G spectrum in 22 circles," Goldman Sachs said in a note to clients. Vodafone offers services in 16 circles and No. 3 carrier Idea Cellular is present in 13.
The US brokerage noted that the potential combine would "breach overall spectrum caps in Tamil Nadu, West Bengal and Jammu & Kashmir. Operators are not allowed to hold more than 25% of the total spectrum in a circle. People familiar with the matter said the new entity may surrender excess airwaves.
Brokerage IDFC said the combined wireless operations of "RCom, Sistema Shyam and Aircel would have a formidable 12 per cent revenue market share, but the debt burden of both RCom (Rs 39,900 crore) and Aircel (Rs 20k-to-24k crore range) could be a possible deal breaker."
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment