Reliance Communications and Maxis Aircel announced plans to merge their operations into a single merged entity which will create the third largest telecom company on the basis of a subscriber base. While the deal promises to ruffle up the domestic telecom sector even further, with intense competition already a part of the mix with Reliance Jio's entry, brokerages hold different views about what this merger would possibly mean for the sector.
Anil Ambani-led RCom and Maxis Communication Berhard's Aircel will entry into a 50-50 deal and create a new entity with a new name and image. The merged entity will have equal representation on the board from both the companies.
India Ratings and Research, in a report, said that "The merger of the wireless business of Reliance Communications (RCom) with Aircel Limited (Aircel), is a key milestone in the ongoing consolidation in the telecom sector. the merger will enable the new entity RCom-Aircel to give strong competition to its peers in the backdrop of the disruption that the launch of operations by Reliance Jio Infocomm (RJio) has caused."