Sistema will get a 10% stake in RCom once the deal goes through. Sistema Shyam TeleServices offers data services in India under the MTS brand and the proposed merger with RCom is an all-stock deal, which marks the beginning of consolidation in the telecom sector.

The deal is critical for Reliance Communications as it will give the company a new lease of life by giving it access to spectrum for 18 years. RCom's spectrum in the 800 MHz band expires in 2021. This will extend the validity of RCOM’s spectrum in 800 / 850 MHz band in eight important circles by a period of 12 years from 2021 till 2033 (Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP (West) and West Bengal). RCom will acquire nine million (approximately) customers and Rs 1,500 crore in revenues by virtue of the transaction.

Access to precious spectrum removes concerns on business continuity foor RCom as it will acquire SSTL’s superior air waves in the 800/850 MHz band, which is ideally suited for 4G LTE services.

Reliance Communications will not see any cash outflow thanks to the deal other than the Rs 392 crore a year it will need to pay to the Union government for spectrum license hitherto owned by the Russian operator. RCom will have to pay this for the next ten years. In return, Sistema JSFC, a publicly-traded diversified holding company in Russia and the CIS, will get a 10% stake in RCom. Once the deal goes through, Sistema will only play the role of a strategic investor and will not get a board seat or a veto, which will give continuity in managing the company's operations.