Billionaire Anil Ambani-led Reliance Communications today said it will take over Russian conglomerate Sistema's Indian mobile telephony venture that operates under the MTS brand.
While financial details of the deal were not immediately announced, RCom said Sistema Shyam Teleservices Ltd (SSTL) will hold a 10 per cent equity stake in RCom as a result of the deal.
In addition, RCom will assume the liability to pay the government installments for SSTL's spectrum, amounting to Rs 392 crore per annum for the next 10 years.
"RCom will acquire approximately 9 million customers and approximately Rs 1,500 crore of annual revenues by virtue of the transaction," the company said in a statement.
In addition, RCom will acquire SSTL's most valuable and superior 800/850 MHz band spectrum, ideally suited for 4G LTE services, to complement its own unique nationwide footprint of minimum 5 MHz contiguous 800/850 MHz spectrum aggregating 148.75 MHz.
This will extend the validity of RCom's spectrum in 800/ 850 MHz band in 8 important circles by a period of 12 years from 2021 till 2033 (Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP (West) and West Bengal).
"Prior to closing of the transaction, SSTL intends to pay off its existing debt," the statement said without giving details.