India’s fourth- and fifth-largest carriers are in talks to combine wireless operations. The potential merger between Reliance Communications and Aircel would make them the second-largest carrier in India in terms of customer base.
Reliance Comm, which is currently India’s No. 4 operator, entered into exclusive 90-day talks with Aircel to discuss merging the two company’s mobile phone service business.
The potential merger would reportedly exclude tower and fiber optic cable assets, which are already involved in another pending transaction. In an effort to cut its debt load, Reliance signed a non-binding contract to sell its infrastructure business a group including TPG Capital Management.
In another move toward consolidation for the Indian telecom market, Reliance Comm last month bought Russian conglomerate Sistema’s Indian mobile phone business in an all-stock deal.
All of these moves come ahead of Reliance Comm’s major LTE rollout, which is expected to take place in fiscal year 2016-2017. The ambitious plan includes more than 100,000 macro sites, 150,000 small cell, 500,000-plus Wi-Fi access points and more than 234,000 kilometers of fiber to be deployed in the next three years. The company’s goal is to have more LTE subscribers than all of the the U.S. telcos combined in the next two years.
The small cell deployment is perhaps the most ambitious part of the plan. To meet the lofty targets, Jio created its own automated workflow designed to allow every employee to access small cell data from a tablet.
Aircel is reportedly facing net losses of $708 million for 2014, according to ratings agency CARE Ratings.
India’s telecom sector is the second-largest, trailing only China in mobile phone subscribers. There are currently up to 10 operators jockeying for position in the market.
