The board of Anil Ambani-led Reliance Communications (RCom) will on Monday consider a merger arrangement with the India operations of Russian telecom giant MTS, RCom said in a filing with the Bombay Stock Exchange (BSE).
RCom has been in talks with Sistema Shyam Teleservices (SSTL) since June to merge the latter's Indian operations with itself. SSTL provides data services in India under the MTS brand to 10 million subscribers across 450 towns.
"Reliance Communications has informed BSE that a meeting of the Board of Directors of the company will be held on November 2 to consider a scheme of arrangement for demerger of the telecom business undertaking of Sistema Shyam Teleservices Ltd. into the company," Rcom informed the Bombay Stock Exchange.
The deal would extend the validity of the RCom spectrum by 12 years.
"The proposed merger will be highly value-accretive for RCom, as it will, in eight important circles, extend the validity of the 850-MHz spectrum by a significantly long period of 12 years, all the way up to 2033," Anil Ambani said at the company's annual general meeting on September 30.
As part of the stock swap deal negotiated, Sistema would get a stake of 8-10 percent in the merged entity, while RCom would hold controlling stake.
The combined entity will have about 120 million subscribers, making it the fourth largest telecom operator in India, after Airtel, Vodafone and Idea.
MTS India operates in nine circles - Delhi, Gujarat, Karnataka, Kerala, Kolkata, Rajasthan, Tamil Nadu, Uttar Pradesh (West) and West Bengal.