KOLKATA: Reliance Communications’ plan to merge Sistema’s Indian assets with itself is seen giving it scale and helping it reduce cost and spectrum renewal risks, but experts point out that it has brought into focus ambiguity in spectrum holding rules in M&As. In a report, brokerage Credit Suisse said that Sistema Shyam Teleservices (SSTL) provides a “good complementary fit” for Anil Ambani-owned Reliance Communications, given its spectrum holdings in the 800MHz band, which can be used for 4G services.
NEW DELHI: Anil Ambani-led Reliance Communication has said it is in talks with AFK Sistema to merge the Russian conglomerate’s Indian telecom operations through a cashless stock swap. “Reliance Communications (RCom) and AFK Sistema have entered into exclusive discussions on a potential merger between the Indian telecom business of Sistema Shyam TeleServices Ltd (SSTL) and RCom through a stock swap,” the company said in a statement. The discussions, it said, are “indicative and non-binding in nature, and remain subject to due diligence, definitive documentation and approvals, as may be necessary.”
KOLKATA: Earnings of telecom companies Bharti Airtel, Idea Cellular and Reliance Communications may take a sharp hit in 2016-17, weighed down by higher amortization and interest costs after buying expensive spectrum, analysts say. Increased costs, along with a likely delay in the launch of Reliance Jio Infocomm’s service, may result in some tariffs going up, they said. Market leader Bharti Airtel’s net profit may dip 8% in the financial year starting April 1, 2016, US brokerage Morgan Stanley estimated, while that of Idea Cellular and RCom are set to decline 27% and 26%, respectively, factoring in higher interest and depreciation outflows.
MUMBAI: Facebook is set to launch internet.org, an initiative to provide internet access to those who don’t have it, in India through a tie-up with Reliance Communications, two people familiar with the development said. The social media giant and India’s fourth largest mobile operator have called a joint press conference in Mumbai on Tuesday for, what the invite says, “one launch that will make a billion dreams take off”.