Mukesh Ambani may buy out smaller telecom companies | business | Hindustan Times
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Mukesh Ambani may buy out smaller telecom companies

business Updated: Feb 20, 2014 02:44 IST

Sitting on a huge cash pile of Rs 88,705 crore, Mukesh Ambani-led Reliance Industries Ltd (RIL) is understood to be looking at acquisitions in the telecom space, in which it is a new but ambitious entrant.

Indicating its intent to offer voice services in addition to Internet and armed with a unified access services licence, RIL’s telecom arm — Reliance Jio Infocomm (RJI) is said to be scouting to pick up a small GSM operator, industry sources told HT.

The company last year picked up broadband wireless spectrum in a relatively low-profile entry, but has since positioned itself to be a full-service player joining the ranks of companies such as Bharti Airtel, Idea Cellular and Vodafone.

Global ratings agency Fitch in a recent forecast also hinted at the possibility of cash-rich RIL acquiring a small GSM based operator through its telecom arm to increase its spectrum holdings.

An RIL spokesperson refused to comment on the company’s acquisition plans. However, sources close to RIL said Ambani’s elder son Akash Ambani, who has joined Reliance Jio, is closely involved in the company’s telecom plans and strategy formulation along with Mukesh’s close aide Manoj Modi.

With big plans to fan out in the telecom sector, RJI picked up 1,800 megahertz spectrum for Rs 11,054 crore at the recently concluded 2G auction, which is mostly used for voice services by incumbent operators.

After securing the spectrum in the auctions RIL chairman Mukesh Ambani had said: “With this acquisition, Reliance Jio will be the holder of the largest quantum of liberalised spectrum and with the longest residual spectrum life…with an integrated ecosystem, (and) aims to provide unparalleled high quality access to innovative and empowering digital content, applications and services.”

Significantly, telecom secretary MF Farooqui on Wednesday said much-awaited guidelines for mergers and acquisitions of telecom companies are expected to be in place within 10 days.

“Auction is one way of acquiring spectrum. We are working on number of ways in which spectrum can be acquired. M&A will serve as another way in which spectrum can be acquired,” Farooqui said.