Telecom service provider Reliance Communications has confirmed its merger talks with MTS India or Sistema Shyam TeleServices.
Anil Ambani-promoted Reliance Communications, which has 118 million subscribers, is planning to purchase MTS India through a stock swap. MTS India has nearly 10 million mobile subscribers in its 9 telecom circles.
“The discussions are indicative and non-binding in nature, and remain subject to due diligence, definitive documentation and approvals, as may be necessary. There is no certainty that any transaction will result,” said Reliance Communications said in a filing with stock exchanges.
If the deal materializes, it will be the exit of MTS brand from India. Sistema Shyam TeleServices is the Indian arm of the Russian group Sistema. Both are major players in the CDMA segment. MTS India exited from several telecom circles due to the 2G spectrum controversy. Later, the company did not buy spectrum to expand in India.
Sistema of Russia, which has 57 percent stake in MTS India, has invested more than $3 billion in its Indian wireless venture since 2007. It spent $570 million on wireless spectrum in 2013, securing coverage in eight Indian regions including Kolkata and New Delhi.