WebSify
Follow us on
Mail
Print

Reliance Jio's tenancy push may help Globalcom sale

Source : BUSINESS_STANDARD
Last Updated: Sat, May 11, 2013 18:57 hrs
​Ambanis come together at family function

Mukesh Ambani-promoted Reliance Jio Infocomm is in discussions with Anil Ambani's Reliance Globalcom to lease the latter's under-sea cable infrastructure for its coming 4G LTE services.

Reliance Globalcom is a unit of Reliance Communications (RCom), which owns an undersea cable system spanning 65,000 kilometres that is integrated with RCom's nationwide optic fibre network.



In an effort to reduce its debt of about Rs 36,000 crore, RCom is in talks with a consortium of private equity firms led by Samena Capital to sell Globalcom, which is valued at about $1.3 billion (about Rs 7,000 crore), according to a private equity firm familiar with the discussions. Earlier, the company's efforts to de-leverage the balance sheet by selling this asset didn't yield positive results.

"Reliance Jio's tenancy is already factored in for the ongoing discussions on the sale of Globalcom," said a person privy to the discussions. This is expected to aid the sale of the company, as improved tenancy would reduce asset utilisation concerns. RCom has said talks with Samena are expected to be completed by the end of this month.

RCom declined to comment on the deal.

On April 2, Reliance Jio had signed an agreement with RCom to use its nationwide inter-city optic fibre network. Reliance Jio paid an upfront fee of Rs 1,200 crore for a 20-year period. Now, Reliance Jio is also in talks to use RCom's intra-city and tower network, and it is expected the deal would be completed by mid-June.

Reliance Jio has also announced it would use Bharti Airtel's dedicated fibre cable connecting India and Singapore. Incidentally, this direct connectivity isn't available with Globalcom, which is focused on the markets in Europe and North America. "One integrated network would obviously be far more efficient to provide overall quality network experience," said the person quoted earlier.

Reliance Jio officials were not available for comment and an e-mail sent to them didn't elicit a response.

Reliance Jio plans to provide pan-India internet connectivity. It also plans to provide end to-end solutions that address various digital services in key segments such as education, healthcare, security and financial services.

In a letter to shareholders in Reliance Industries' latest annual report, Chairman Mukesh Ambani had said, "Reliance Jio has finalised key agreements with its technology partners, service providers, infrastructure providers, application partners, device manufacturers and other strategic partners for the project." The company plans to launch the service by the year-end.

blog comments powered by Disqus
most popular on facebook
talking point on sify finance