Reliance Jio to hire 32,000 telcom towers owned by RCom in yet another breakthrough deal by Ambani brothers Sanjay Singh | Mail Today | New Delhi

     


The second deal between the Ambani brothers which will see Reliance Jio - controlled by Mukesh Ambani - hiring as many as 32,000 of the 45,000 telecom towers owned by Anil Ambani's Reliance Communications (RCom) is expected to be clinched this month

According to sources, Reliance Jio will sign an agreement to lease the 32,000 towers for an annual payment of Rs.1,000-Rs.1,200 crore as rent. RCom's subsidiary Reliance Infratel owns the 45,000 telecom towers, which have excess capacity, and the company has been looking for prospective buyers since 2010.

Interestingly, Mukesh Ambani had spearheaded the operation to lay Reliance Infocomm's optic fibre network across the country in 2002 when the brothers were jointly running the family's business empire. It was only after the two brothers divided the family assets, that the telecom business passed into younger sibling Anil Ambani's hands.


Reliance Jio plans to run fourth generation (4G) telecom services, which provide advanced mobile communication services ranging from mobile Web access to high-definition mobile TV, video conferencing, 3D television and cloud computing. The Internet download speed offered by 4G services is ten times faster compared to 3G services and 16 times that of 2G. The service will be launched on the birthday of late Dhirubhai Ambani in December. Reliance Industries Ltd (RIL) is the only operator to have pan-India licence for 4G broadband services and has ambitious plans that could upset large players like Bharti Airtel and Vodafone. It plans to sell tablets at a much cheaper price of less than Rs.3,000 with much-much cheaper voice rates.

Earlier, RCom was in talks with various stakeholders in and outside India for selling its stake in tower business. In 2010, RCom was in discussions with another leading tower company GTL Infrastructure to merge their tower business but the `50,000 crore-transaction fell through.

RIL's move to use RCom's network, which has a surplus network that was once created with nine pipes laid across the 1.2 lakh kilometres and equipped to carry voice data and video. Bharti Airtel has a similar network of 1.6 lakh kilometres.

RCom is also working on selling almost 80 per cent of its stake in its undersea cable arm Reliance Globalcom to a consortium led by Bahrain Telecommunications Company (Batelco) for around Rs.6,000 crore. The entire Rs.6,000 crore will come in as an equity infusion into RCom.

These deals will help RCom reduce its debt burden of Rs.37,360.6 crore as of December 2012. In their first business tie-up since ending the long-running feud, the brothers last week inked a deal worth Rs.1,200 crore under which Reliance Jio will use Rcom's optic fibre network to launch his 4G telecom services.