Reliance Communications likely to merge with Tatas to take on Vodafone-Idea merger, rising power of Reliance Jio

Reliance Group Chairman Anil Ambani is said to have met newly appointed Tata Sons Chairman N Chandrasekaran to talk about the possible merger of Reliance Communications with the Tata Group.

In an effort to counter rising Reliance Jio and upcoming Vodafone and Idea merger, Reliance Communications may merge with Tata Teleservices.

"Nothing has been finalised yet,” ET quoted sources as saying, who added there are some obstacles such as Tata Tele's debt of about Rs 30,000 crore. The legal issue regarding NTT Docomo's exit from Tata Tele also needs to be resolved, the source told ET.

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If the deal gets through, RCom, Aircel and MTS will be one entity, which will have around 260 million subscribers. Presently, Airtel has 266 subscribers and Vodafone and Idea Cellular have 205 million and 190 million subscribers, respectively.

Jio had over 72 million users as of December end.

“While the combined entity won't be breaching any spectrum holding limits, it may choose to surrender some or all of Tata Tele's 800 MHz airwaves as RCom on its own, and through its sharing tie-up with Jio, already has a lot of those 4G airwaves and may not want to pay the additional amount to the government,” ET quoted sources as saying.

The telecom war has intensified.

"It does not make sense to stay in an industry if you are not among the top three,” one of the persons told ET.