RCom in talks with Sistema for possible merger

NEW DELHI: Anil Ambani-led Reliance Communications (RCom) is weighing the option of a possible merger with Russia's Sistema for their India telecom businesses.

The merger could take place through a share swap.

In a statement to the Bombay Stock Exchange, RCom said: "The discussions are indicative and non-binding in nature, and remain subject to due diligence, definitive documentation and approvals, as may be necessary. There is no certainty that any transaction will result."

The deal is critical for RCom as its spectrum license in 900 MHz expires this December. The company has licenses for seven circles in this bandwidth. The company could not win back spectrum in three circles of West Bengal, Assam and Bihar, in the spectrum auctions held in March this year.

Russia's Sistema, which operates its telecom services under the MTS brand in India, didn't participate in the spectrum auctions in March, citing higher prices of airwaves.

The announcement comes just days after Reliance Jio, the telecom arm of Anil Ambani's elder brother, Mukesh Ambani-led Reliance Industries, declared its 4G rollout plans, which could be a game-changer for the entire telecom industry.