R Comm and Aircel to buddy up soon

Reliance Communications' and Aircel's merger is in the final lap of getting cleared. Reliance Communications which was waiting for a nod from the Department of Telecom (DOT) is now  relieved. According to some media houses, DOT has said there is no need of approval from the legislator. It is the wireless operations of Reliance Communications Ltd., (R-Com) and Aircel Ltd., that are going to merge. Both the sides were in talks for the prospective merger as the position of both the companies in the wireless segment was constantly deteriorating in the past few months.

The deal will help both the companies, but widely will benefit the debt ridden Aircel, as it will take advantage of Reliance Jio Infocomm Ltd.’s 4G LTE network and thus porting of all Aircel subscribers to the new network will happen. The merger between two entities is anticipated to earn revenue of approximately 25000 crores.
Aircel has a spectrum to offer 3G in 13 markets while R Comm has it in 11 circles. With Jio 4G services in the kitty, new entity will be able to offer broadband services without sinking in billions of dollars in network and spectrum.

On the other hand, stocks of Reliance Communications on Aug 26 closed at Rs 53.90, up by 4.66 per cent. Scrip of the company has largely surged owing to the news of the merger. In the last 3 months, shares of the company have surged by 13 per cent. 52 week High/Low of the company stands at Rs 91.80/45.55.The deal, is expected in the 1st week of September, and if successfully through, the new entity will hold 19.3 percent of total spectrum allocated to the Telecom sector.