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Tata Group considering merger of Tata Teleservices with Reliance Communications

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While Reliance Communications, Aircel and MTS are working on a merger to sustain in the highly competitive telecom industry, Tata Teleservices is also looking to join forces.

According to reports from the Economic Times, Reliance Communications and Tata Group are apparently in talks to explore a possible alliance with the upcoming entity comprising of Reliance Communications, Aircel and MTS. The matter is apparently being discussed by Anil Ambani, chairman of the Reliance Group and N Chandrasekaran, the newly anointed Tata Sons chairman.

Considering the pending Vodafone and Idea merger, should this deal goes through, then the combined entity would be the third ranking operator in the industry following the merged Vodafone-Idea entity and Airtel.

However, considering Tata Teleservices debt of about Rs. 30000 crore and the legal issues regarding NTT Docomo’s exit, things could get slightly difficult for the merger. But State Bank of India, a key lender to RCom, Aircel and Tata Teleservices is said to be favouring the consolidation. Given the situation with Tata Group, the board may consider shutting down the telecom services if the merger doesn’t go through.

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