Ambanis ink $2.1bn telecom deal
Mumbai, June 8, 2013
India's billionaire Ambani brothers have announced a $2.1 billion deal to share telecom tower infrastructure, cementing a reconciliation between the once-warring siblings.
The agreement is another tangible sign that the two are patching up relations since their bitter fight for control of Reliance erupted after their rags-to-riches father, Dhirubhai, died in 2002 without leaving a will.
Reliance Jio Infocomm, the telecom unit of Mukesh Ambani-led Reliance Industries, signed the agreement with Reliance Communications, the flagship firm of the Anil Ambani group, to share the latter's telecom tower equipment, a joint statement said.
The move will help Reliance Industries to accelerate the roll-out of its long-awaited high-speed fourth generation (4G) telecom services, the companies said.
The aggregate value of the deal is more than Rs120 billion ($2.1 billion) for the duration of the agreement, which was not specified, the statement added.
"Under the terms of the agreement, Reliance Jio Infocomm will utilise up to 45,000 ground and rooftop-based towers across RCom's nation-wide network for accelerated roll-out of its state-of-the-art 4G services," the firms said.
In April, the two firms signed a $220 million deal to share their fibre-optic communications networks.
The latest agreement also allows the two companies to jointly build more towers at new locations.
"The deal is positive for RCom, to help it reduce its debt over a longer-term," Ankita Somani, analyst at Mumbai's Angel Broking, said. RCom has been staggering under a debt of more than $6bn.
The brothers have been increasing their corporate collaboration since they publicly signalled the end of their dispute with a joint appearance in December 2011 to dedicate a memorial to their late father in his home town.
Even after they broke up Reliance, the brothers kept battling, fuelled by differences over a 2005 family-brokered deal to share resources from India's largest gasfield.-Reuters