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Anil aids Mukesh, quietly

Is brotherly love back in fashion at the Ambani empire? While Mukesh Ambani-led Reliance Industries Ltd jumped into the telecommunications game, the step was indirectly blessed by his brother Anil, writes Manoj Gairola.

business Updated: Jun 11, 2010 22:11 IST
Manoj Gairola

Is brotherly love back in fashion at the Ambani empire?

While Mukesh Ambani-led Reliance Industries Ltd (RIL) jumped into the telecommunications game on Friday with the swift acquisition of the company that led as the leading winner in broadband wireless access (BWA) spectrum auctions, the step was indirectly blessed by his brother Anil.

Industry sources note the Anil Dhirubhai Ambani Group’s (ADAG’s) Reliance Communications had made an early exit from the 16-day-long BWA spectrum auctions, and that effectively offered a right of way to the elder brother, who acquired 95 per cent in Infotel, controlled by Mukesh’s old ally Mahendra Nahata of HFCL.

“We exited from the bidding last week when we realised that the price of BWA spectrum is going very high,” said an RCom spokesperson, playing down any linkage “We have CDMA technology and we can use it for providing broadband services.”

RCom board had last week approved selling up to 26 per cent equity stake and is ready for strategic partnerships. The company is in negotiations with UAE’s Etisalat, but industry sources say that RIL may also be an interested party.

RIL could also use RCom as a partner. Industry sources said the company will not put up its own infrastructure initially and instead use RCom’s towers.

RCom, in fact, was Mukesh’s baby before a division of assets in 2005 between the estranged brothers following the death of their father Dhirubhai. The elder brother had painstakingly laid the foundations of RCom and nurtured it when it was called Reliance Infocomm.

“Mukesh Ambani’s heart was always in telecom,” said B K Syngal, first chairman of Reliance Telecom, which was RIL’s first foray into the. “He has proved this love by acquiring Infotel Broadband. At some point of time he will enter the voice segment as well.”

RCom has most subscribers in India after Bharti Airtel but its expansion into 2G services has loaded it up with debt that totalled Rs. 19,500 crore last March.

The company also successfully participated in 3G spectrum Manoj Gairola.