JOIN US Reliance Communications (RCOM) has received approval from the Competition Commission of India for acquiring Sistema Shyam Teleservices (SSTL).
“Further to our letter dated January 14, 2016, we wish to inform you that the Competition Commission of India has approved transfer of telecommunications undertaking of Sistema Shyam Teleservices to the company,” RCOM said in a notification to the exchanges.
RCOM had in November 2015, decided to demerge Sistema’s Indian wireless business, carried on by SSTL into RCOM. SSTL will acquire and hold a 10 per cent equity stake in RCOM post the deal. In addition, RCOM will assume the liability to pay the DoT instalments for SSTL’s spectrum, amounting to Rs 392 crore per annum for the next 10 years. Prior to closing of the transaction, SSTL planned to pay off its existing debt. The closing of the transaction is expected in the second quarter of 2016, RCOM (Department of Telecommunication) had said at the time of the deal announcement.
Post closing of the deal, minority investors of SSTL will be given an option to exchange their shares in SSTL with the pro-rata RCOM shares held by SSTL.. RCOM will acquire approximately 9 million customers and Rs 1,500 crore of annual revenues by virtue of the transaction.
In addition, RCOM will acquire SSTL’s 800/850 MHz band spectrum, ideally suited for 4G LTE services, to complement its own unique nationwide footprint of minimum 5 MHz contiguous 800/850 MHz spectrum aggregating 148.75 MHz. The acquisition of this spectrum will extend the validity of RCOM’s spectrum in 800 / 850 MHz band in 8 important circles by a period of 12 years from 2021 till 2033 (Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, Uttar Pradesh (West) and West Bengal.)