NEW DELHI: Billionaire Anil Ambani’s Reliance Communications and smaller rival Aircel announced Wednesday they were combining their mobile phone businesses, in what they called the “largest-ever consolidation in the Indian telecom sector”.
Reliance Communications (RCOM) and Aircel’s Malaysia-based parent Maxis Communications Bhd (MCB) will each own 50 percent of the new company, they said in a joint statement on Wednesday.
“The RCOM-Aircel combination will create a strong operator clearly ranked amongst India’s top four telcos by customer base and revenues,” the statement said.
It added that the deal will help reduce RCOM’s debt by $3 billion, or more than 40 percent of its total debt, and Aircel’s by $600 million.
The companies reportedly began talks in December.
The announcement comes at a time of intensified competition and dramatic reshaping of the world’s second-biggest telecoms market.
Anil’s elder brother, Mukesh Ambani — India’s richest man and the chairman of Reliance Industries — announced earlier this month the launch of his long-awaited Reliance Jio 4G network with an audacious free service for the rest of 2016, followed by vastly cheaper data plans and free voice calls for life.
Reliance Jio hopes to service 90 percent of India’s 1.25 billion population by March 2017 and seeks to upend a market at present two-thirds dominated by three players — Airtel, Vodafone and Idea.