The merger will formulate one of the biggest private entities in India, having as asset base of over $9.7 billion and net worth of Rs.35,000 crore ($5.2 billion). It will also be the second largest holder of spectrum in the country amongst leading operators aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands and will enjoy extended spectrum holding till 2033-35. The deal is also said to cut down the amount of debt incurred by both the companies by a significant margin. RCOMs debt is estimated to go down by $3 billion, which amounts to be 40% of its total debt and Aircel’s by 4600 million upon completion of transaction due in 2017.

On the announcement, Anil Ambani, Chairman, Reliance Group said, “Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the Indian telecom sector, first, with RCOM’s acquisition of the wireless business of SSTL (Sistema/MTS), and now, with the combination of our business with Aircel Ltd. in a 50:50 joint venture with MCB. We expect this combination to create substantial long term value for shareholders of both, RCOM and MCB, given the benefits of the wide-ranging spectrum portfolio and significant revenue and cost synergies.”

The cumulative subscriber data base of the merged entity is estimated at 190 million. Presently Airtel has a subscriber base of 251 million, Vodafone with 198 million and Idea Cellular with subscriber base of 175 million.

The industry has positive hopes from the deal. TV Ramachandran told ET Now, “RCom-Aircel merger may turn out to be long term positive for industry. One must enable fresh investment in the telecom space and serve consumers better.”

Reference link: http://www.mydigitalfc.com/telecommunication/rcom-aircel-merge-create-rs-65k-cr-asset-base-681