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Reliance Communication’s stock price gained almost 3 per cent last week on the news of a possible merger with Aircel. According to reports, Reliance Communications plans to acquire all the wireless assets of Aircel.
In early November 2015, Reliance Communications announced that it will take over MTS, the Indian brand of Sistema’s mobile telephony venture operation, in an all-stock deal. The non-binding discussion with Aircel, if successful, will create the second largest telecom operator in terms of subscribers and fourth largest by revenue. Total subscribers of the merged entity are expected to exceed 200 million, with a revenue market share of about 14 per cent. Currently the largest telecom player, Airtel has about 340 million customers.
Increasing competition and the impending launch of services by Reliance Jio will make sustenance difficult for the other telecom players.
In the latest September quarter, Reliance Communications’ total revenues fell by 0.87 per cent year-on-year to ₹5,355 crore. Net profits on the other hand showed a marginal increase of 1.9 per cent to about ₹155 crore.
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