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Ambanis cosying up for one more deal

The two Ambani brothers, Mukesh and Anil, are likely to sign another deal for infrastructure in telecom business within a fortnight. Manoj Gairola reports. A towering deal?

business Updated: Apr 09, 2013 23:23 IST
Manoj Gairola

The two Ambani brothers, Mukesh and Anil, are likely to sign another deal for infrastructure in telecom business within a fortnight.

Anil Ambani-owned Reliance Communications (RCOM) and Mukesh Ambani-owned Reliance Jio Infocomm (RJI) are negotiating an agreement, under which the latter will lease RCOM's towers for its 4G services.

If the deal fructifies, it will be the second deal between the two brothers who partitioned Reliance group between them about eight years ago.

Both RIL and RCOM declined to comment.

Earlier this month, RJI and RCOM announced an agreement for leasing of optical fibre cable (OFC) network of RCOM by RJI.

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"Unlike OFC network, there will not be any upfront payment in the tower deal. RCOM will get only monthly rental that will depend on the number of towers. RCOM has about 50,000 towers. Initially, RJI may lease only 60% of the towers," said a source familiar with the developments.

Lease rent of a telecom tower depends on a number of factors including location, situation of power supply etc. A tower is rented for Rs 10,000-25,000 per month.

"It is difficult to indicate the size of the deal at this moment as details are still being worked out," said the source. RCOM may earn around Rs 1,000 crore per annum from the leasing of towers to RJI.

The valuation of RCOM's telecom towers business is expected to appreciate substantially if the two brothers sign a deal for sharing of towers. This is expected to help RCOM retire some of its Rs 37,000-crore debt.