Economy

RCom calls off merger with Aircel due to legal, regulatory uncertainties

RCom calls off merger with Aircel due to legal, regulatory uncertainties”

Reliance Communications and Aircel have called off talks for a possible merger of their respective mobile service operations. In a statement submitted to the Bombay Stock Exchange (BSE), Reliance Communications said that the decision to call of the merger with Aircel has been taken in view of the uncertainties present in the regulatory environment. The report says that RCom had been trying to reduce its heavy debt by 250 billion rupees by merging its wireless business with rival Aircel.

The company, widely known as RCom, said it had agreed with Aircel to call off the proposed deal due to regulatory delays and legal uncertainties. "It is not in the general ward, it is not in the ICU, it is in the ICCU", Ambani said at Reliance Communications' (Rcom) annual general meeting, as per PTI.

The company said it will evaluate alternative plan for its mobile business by optimising spectrum portfolio and focus on 4G technology as part of its ongoing strategic transformation.

The decision comes days after Anil Ambani had said the telecom sector is in an "ICCU" with government and lenders most at risk. 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. Due to these reasons, the merger with Aircel has been called off, RCom said. The company is now trying to raise funds through optimization of spectrum portfolio and sale of its tower and fiber assets and real estate. These are expected to generate around Rs 25,000 crore for the cash-strapped company.



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