Tata Teleservices (TTSL), Aircel and Sistema Shyam TeleServices (SSTL) are involved in preliminary talks regarding a potential three-way merger to create India’s third-largest telecoms company by subscribers, the Economic Times writes, citing three people familiar with the matter. The deal would allow the companies to pool infrastructure and capital resources as well as cut operating expenses. According to the unnamed sources, SSTL would become the dominant shareholder, due to the financial strength of its Russian parent Mobile TeleSystems (MTS) and the debt issues currently plaguing Aircel and TTSL. SSTL officials complaining about the decision to omit 800MHz spectrum from the upcoming auctions yesterday criticised the nation’s twin regulators, casting doubt on the company’s continued presence in the market. Previously, a spokesperson for the Russian-backed cellco had commented that the Indian market was ripe for consolidation, and that the ‘top seven players [will] shrink to just four,’ adding that foreign investors would lead the way on that front.
According to TeleGeography’s GlobalComms Database, the trio had a combined subscriber base of 135.37 million users as at end-June 2013, giving it a market share of 15.6%. By comparison, market leader Bharti Airtel claimed 21.9% of the segment at that date, ahead of UK-backed Vodafone India with17.8% whilst Idea Cellular and Reliance Communications (RCOM) represented 14.4% each.