Mukesh to lease Anil’s cable network for R3,000 crore

NETWORKED BROTHERS Reliance Jio, RCom in talks for third infrastructure sharing agreement in four months

NEW DELHI: The once estranged brothers are coming together again like never before. In the third of telecom infrastructure deals, Mukesh Ambani-led Reliance Jio Infocomm (RJI), a unit of Reliance Industries Ltd, seems poised to share optic fibre networks owned by his younger sibling Anil Ambani-led Reliance Communications within cities across the nation.

Talks are on for a deal whose value is estimated at R3,000-crore, industry sources said.

The intra-city optic fibre cable (OFC) network is expected to help RJI offer the latest generation broadband services in an ambitious telecom expansion in which 4G mobile broadband services form a key lynchpin. If the deal materialises, it will help RCom ease a crushing debt burden.The company has already reduced its debt to R31,000 crore from the level of about R37,000 crore in March. Mukesh Ambani re-entered the telecom business at the end of a non-compete period during which the brothers were not allowed to compete in each other's turf following a division of assets in the industrial empire founded by their late father Dhirubhai Ambani, who died in 2002.

Things have come a full circle, in a way. It was Mukesh who started building the networks when the late Dhirubhai was alive and RCom was a jointly managed enti- ty. In last quarter or so, the two brothers have signed two important deals — one to lease of RCom’s fibre cable network connecting cities and another for a multi-year lease of 45,000 telecom towers. The proposed third deal covers fibre networks within cities.

The concluded deals have brought in much-needed cash for RCom that has been built big on borrowed cash.

RJI’s 4G wireless services will run in tandem with towers and fibre rented from RCom. The RIL unit will have to install its own equipment on top of RCom’s towers to offer high-speed broadband services. The 4G services offer broadband speeds of up to 100 Mbps. Anil Ambani’s RCom this week announced it was hiving off its real estate assets into a separate listed company to reduce debt.

It is also negotiating to sell an 80% stake in Reliance Globalcomm, which owns an international undersea cable network, to the US-based Providence Equity Partners for R7,000 crore.