Mumbai: Telecom company Reliance Communications Ltd (RCom) said on Sunday it had mutually agreed with smaller rival Aircel to call off a proposed merger of its wireless business, citing delays due to regulatory and legal uncertainties and interventions by various parties.
“Merger of mobile business of RCom and Aircel lapses with mutual consent,” Reliance Communications said in a release. “Unprecedented competitive intensity in the Indian telecom sector, together with fresh policy directives adversely impacting bank financing for this sector, have also seriously affected industry dynamics. As a result of the various factors aforesaid, the merger agreement has lapsed. The board approved the same,” the Anil Ambani-led firm said in the statement.
RCom and Aircel had signed binding agreements in September 2016 for the merger of RCom’s mobile business with Aircel.
Reliance Communications has been trying to reduce its heavy debt by Rs25,000 crore by merging its wireless business with rival Aircel and by selling a stake in its mobile tower arm to a unit of Canada’s Brookfield Asset Management.
RCom’s net debt stood at Rs44,345 crore at the end of March 2017.
RCom will evaluate alternative plan for its mobile business by optimising spectrum portfolio and focus on 4G technology as part of its ongoing strategic transformation. RCom has been given time till December 2017 to service its debt obligations by its lenders. Reuters
PTI contributed to this story.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.