Ambanis move from tangle to tango
Rivals or partners? Brothers Ambani may work with each others again — at least for the sake of their shareholders and customers.india Updated: Nov 02, 2011 21:47 IST
Rivals or partners? Brothers Ambani may work with each others again — at least for the sake of their shareholders and customers.
Reliance Industries Ltd (RIL) chairman Mukesh Ambani may come to the rescue of Anil Ambani-controlled Reliance Communications Ltd (RCom) by leasing its infrastructure such as towers and optic fibre cables (OFC) to offer high speed broadband services called broadband wireless access (BWA) — which the elder brother entered after the two siblings ended a non-compete pact in the sector.
RIL is expected to launch its BWA services next years. Industry sources said RCom is the likely partner for RIL, though it has two other alternatives – Indus Towers and GTL Infrastructure.
All telecom service providers are under financial pressure in the ultra-competitive telecom market. RCom was earlier in talks with GTL to sell its towers subsidiary. But the deal could not materialise as the two companies disagreed on the valuation of the deal.
RCom recently said that it was in negotiations with companies for hiving off its tower subsidiary as a separate company and then selling its stakes in them.
Industry watchers say if RCom leases out its capacity to RIL, it the business can fetch a higher valuation.
Official spokespersons of both RCom and RIL declined to comment. Sources in the industry, however, said that RIL may also partially lease towers from other companies.
RIL has big plans to launch its BWA services. The company is expected to offer low-cost tablet computers to customers, bundled with broadband service plans.
RIL may also require a large optical fibre network.. Sources said that the company may also lease RCom’s OFC network and use wireless bandwidth for last-mile linkages.