In the biggest consolidation deal in India’s telecom sector, Reliance Communications and Aircel on Wednesday announced the merger of their wireless operations to create a combined entity with assets worth Rs 65,000 crore.

The RCom-Aircel merger follows days after Reliance Industries launched its Jio 4G services in the country.

Reliance Communications, controlled by billionaire Anil Ambani, will own half of the merged the entity, while Aircel’s parent, Malaysia’s Maxis Communications (MCB), will own the other half. The entity will have assets of Rs 65,000 crore ($9.7 billion) and net worth of Rs 35,000 crore ($5.2 billion).

The transaction will reduce RCom’s debt by Rs 20,000 crore ($3 billion), while Aircel’s debt would go down by Rs 4,000 crore ($ 600 million) on closing in 2017, the two companies said.

The merger will also create India’s third largest telecom operator by in terms of subscribers.

The merged entity will have the second-largest spectrum holding among all operators, aggregating 448 MHz across 850, 900, 1800 and 2100 MHz bands.

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The deal is also expected to have Rs 25,000 crore business from the first day of its operation and is estimated to have EBIDTA (cash flow) Rs 7,000 crore and finance cost about Rs 3,000 crore.

“Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the Indian telecom sector, first, with RCom’s acquisition of the wireless business of SSTL (Sistema/MTS), and now, with the combination of our business with Aircel in a 50:50 joint venture with MCB,” Reliance Group Chairman Anil Ambani said.

This combination is expected to create substantial long term value for shareholders of both, RCom and MCB, given the benefits of the wide-ranging spectrum portfolio and significant revenue and cost synergies, he added.

(With PTI inputs)