Anil Ambani led Reliance Communications has announced several newsworthy corporate actions in the recent past. RCom?s ongoing attempts to consolidate the industry at the lower end by announcing attempts at a three way merger between the wireless units of itself, of Aircel & Sistema Shyam (SSTL).
Such an envisaged entity (separately created and listed) boasts ~12% revenue market share (RMS) in the industry with ~204 million subs (second largest subscriber count after Bharti Airtel) with top-3 market share position (based on RMS) in 13 circles and overall #4 player in industry on revenues, also with a vastly improved spectrum portfolio footprint almost rivaling Airtel.
An extensive, deep partnership with Reliance Jio (RJio) across all 22 circles to trade/share spectrum to mutual benefit and
finally (c) monetization of its assets most notably of its tower business - a definitive announcement of which is likely in the month of February.
All these simultaneous corporate actions underway clearly attest to RCom's strenuous efforts to radically strengthen its balance sheet while also attempting to increase its relevance in the market. As a starting point, in our view it needs to pare down debt before it can hope to compete credibly again.
