After Vodafone-Idea merger talks, Telenor in talks with Aircel-RCom for merger

 

The growing competition in the Indian telecom industry is apparently on its way to claim its second casualty after Vodafone-Idea merger. Consolidation between operators is the latest fad in the industry owing to the disruptive launch of Reliance Jio. The latest operator to head the Vodafone way is Norway’s Telenor, which operates in India under the name Uninor. According to reports, the company has reportedly approached Aircel and Reliance Communication to explore a merger possibility through share swap. At the fringes of the industry, the operator has a subscriber base of 53 million active customers.

If the merger is completed, Telenor will own 10 percent in the three-way alliance. Aircel’s promoter Maxis Communication Bhd and RCom will get 45 percent each in the venture. “Discussions among the three had started around last Christmas but it has been in a limbo for the past few weeks due to the Supreme Court shadow over Aircel’s local operations. By the end of this week, there will be clarity on that front. If the court decides to quash Aircel’s licence, then even the bigger Aircel-RCom merger will collapse,” ET quotes an executive aware of the ongoing discussions in its report.

Earlier this month, the Supreme Court said that it would revoke Aircel’s licence if its promoter Ananda Krishnan didn’t appear in a lower court in an ongoing case of corruption. The court also barred the sale or transfer of the 2G airwaves to a third party. Last year, Aircel merged with Reliance Communications under what is considered to be the biggest consolidation in the telecom space of India. RCom had announced Rs 65,000 crore merger of its wireless business with Aircel last September, creating the country’s fourth-largest phone company in terms of customers and revenue. In late 2016, the alliance merged itself with Reliance Jio.

Aircel-RCom is not the only alliance Telenor is eyeing to stay put in India against a complete exit. Earlier this month, Bharti Airtel announced that it was in talks to buy out Telenor’s India arm – Uninor. ALSO READ: Vodafone confirms it is in merger talks with Idea Cellular

If the merger is complete with Aircel-RCom, Telenor, which brands itself as the cheapest provider of voice and data services, will add additional subscribers and additional 4G LTE spectrum. The spectrum it owns can be used for offering 4G services in the 1800 MHz band in seven circles. Additionally, Telenor offers 2G services in six circles and 4G services in 27 towns across the 6 circles. The company further plans to expand its 4G services to 10 more Indian cities. However, Telenor has already marked down its India investments by Rs 5,000 crore since the beginning of 2016, and given the recent launch of affordable Reliance Jio 4G services, the future appears uncertain for operators like Telenor in the price war. ALSO READ: Idea Cellular announces ‘Digital Idea’ app suite to take on Reliance Jio; free till March 31 2017
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