The shares of the Anil Ambani-owned Reliance Communications, which closed at Rs 17.7 a unit on Monday, were trading 1.13% lower at 11.30 am on the Bombay Stock Exchange Sensex after the Department of Telecommunications approved the the company’s merger with Sistema Shyam Telecom, The Economic Times reported.
The acquisition of Sistema, which runs the MTS brand in nine circles, will add around 2 million customers and annual revenue of around Rs 700 crore to RCom, PTI reported. “RCom will acquire 30 MHz of the most valuable and superior 800/850 MHz band spectrum, ideally suited for 4G LTE services to complement its own unique nationwide footprint,” the company said in a statement.
As per the the terms of the merger, Sistema will receive a 10% stake in RCom, the Financial Express reported. The Anil Ambani-led company will also assume the liability to pay Sistema’s DoT annual instalments of Rs 390 crore for the next eight years.
The approval of the merger is being hailed as a good news for RCom after its deal with telecom operator Aircel collapsed earlier this month.