Reliance Communications (RCOM) is reportedly in talks with Sistema Shyam TeleServices Limited (SSTL) and Aircel for a three-way merger. If concluded, the merged entity could become the third largest telecom operator in India.

In the first phase, RCOM may first merge with SSTL through a share-swap agreement. Under the second phase, the combined entity will merge with Aircel, talks for which are at a preliminary stage. The move will be contingent on Aircel’s and RCOM’s ability to reduce their respective debt burden. While RCOM is in talks for sale of its tower business, Reliance Infratel, Aircel reportedly intends to sell its 4G spectrum to Bharti Airtel.