News Worms
News Worms


Reliance Jio to acquire Anil Ambani-led RCom's wireless assets

Reliance Jio to acquire Anil Ambani-led RCom's wireless assets

Reliance Communication (RCOM) is a diversified telecom service provider offering wireless, wire-line and DTH services. "The company will utilise the proceeds of the monetisation of this cash deal exclusively for pre-payment of debt to its lenders", it said.

The company will reduce debt by monetizing its wireless business and selling land parcels at Dhirubhai Ambani Knowledge City (DAKC), Chairman Anil Ambani said in a press conference. All the company's creditors are on board with the new plan, he said. "RJIL emerged as the successful bidder in the two-stage bidding process", said Jio in a media statement. Jio will also pay the spectrum installments due to the government.

The company expects the transactions to close in a phased manner between January and March 2018, subject to lenders' and other applicable approvals, RCom said. "Don't forget, Jio started operations of telecom in the undivided empire of Ambani, so they know the assets better than an outsider", Soni said, noting that this team actually built those assets. The company went to Anil Ambani's fold in 2005 when the two brothers split their family businesses. As of June, Reliance Jio ranked fourth in overall market share (10.2% against Bharti Airtel Ltd's 23.5%), but it led in internet subscribers (28.6% versus Airtel's 21.9%).

India Ratings and Research says the industry is being redrawn from a large number of operators to an oligopoly as sponsors of smaller, unprofitable telcos exit the field, unable to sustain losses.

Until now, barring Jio, nearly every other player in the telecom sector has been in talks with other players to join hands.

The strategic benefit of this deal will benefit both the brothers as Reliance Jio will enjoy all the wireless infrastructure of RCOM and it will help Jio in unprecedented growth in comparison to other telecom players in India. The estranged siblings had reached a settlement in June 2005, after almost three years of a succession war, with the help of family matriarch Kokilaben Ambani.

Mukesh Ambani has come a full circle in telecom business.

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