RCOM (Reliance Communications) this week claimed that it has concluded its amalgamation with SSTL (Sistema Shyam Teleservices) telecom business in India that operates below the brand name of MTS. “The Reliance Communications’ Board of Directors, at its conference conducted in Mumbai, took on record the end of amalgamation of telecom business of Sistema Shyam Teleservices Ltd. in India, run below the brand name of MTS, with the firm,” a statement from RCOM said.
“The Board also accepted the issuance of stakes to the range of 10% of the equity shareholding of RCOM, to SSTL, as fraction of the deal between the 2 firms,” the statement further claimed shedding some light on the topic. Under the conditions of the deal between Sistema and RCOM, RCOM will get hold of the business of SSTL for telecommunications including its licenses. Apart from this, RCOM will get hold of 30 MHz of the most superior and valuable band spectrum of 800/850 MHz, preferably suited for 4G LTE facilities and other developing technologies, to balance its own unique footprint all over the country.
This will lead to expansion of the validity of spectrum portfolio of RCOM in the 800/850 MHz band in 8 major Circles (Gujarat, Delhi, Karnataka, Tamil Nadu, Kolkata, Kerala, West Bengal, and UP-West) by a time of 12 Years, beginning from 2021 and ending in 2033. As a result of the end of amalgamation, SSTL will get a 10% equity share in the completely diluted equity stake capital of RCOM. Apart from this, RCOM will presume the legal responsibility to pay the installments to Department of Telecommunications for spectrum of SSTL, summing to Rs 390 Crore every year for the next 8 Years.
In one more statement, Sistema claimed to the media, “Sistema PJSFC, a publicly sold branched out holding company of Russia, declares that it has concluded the merger of its telecommunications business in India with Reliance Communications, one of leading telecommunications providers in India. The amalgamation has been accepted by all pertinent courts and regulators of the country.”
For now, all we need to know is how SSTL will survive in the market.