DOT approves RCOM to demerge from SSTL

India Infoline News Service | Mumbai | October 23, 2017 16:59 IST

DOT has given final approval to Reliance Communication for its demerger from Sistema Shyam Teleservices (SSTL), thereby giving it advantage of 4G LTE services in 8 major circles

In a filing made to BSE on Monday, Reliance Communication declared that it had received the final approval from the Department of Telecommunication (DoT) for its demerger of wireless business of Sistema Shyam Teleservices Limited (SSTL) into RCOM.

With this demerger, RCOM will be acquiring about 2 million customers along with an additional revenue of Rs 700 Cr. In addition to this, the company will get possession of 30Mhz of the most valuable and superior 800/850 Mhz band spectrum. This spectrum is ideally suitable for 4G LTE services, thereby able to set its unique footprint nationwide.

The demerger will result in the extension of the validity of RCOM spectrum portfolio in 8 important circles - Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP-West and West Bengal. The extension will be for a period of 12 years, from 2021 to 2033.

With demerger in place, SSTL will receive 10% equity stake in the fully diluted equity share capital of RCOM. The closure of transaction is expected to take place in the first week of November 2017. 

Reliance Communications Ltd ended at Rs 17.7, up by Rs 1.25 or 7.6% from its previous closing of Rs 16.45 on the BSE.
The scrip opened at Rs 16.4 and touched a high and low of Rs 17.95 and Rs 16.4 respectively. A total of 735 lakh shares were traded on the counter.

***Note: This is a NSE Chart

 

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