More India IP Communications Stories
June 29, 2010
Reliance Communications to Sell Cell Towers
TMCnet Contributing Editor
India's second largest mobile operator, Reliance Communications, “has entered into an agreement to sell its cellular towers business to GTL (News - Alert) Infrastructure, a large Indian company specialized in providing shared tower and other infrastructure services to mobile operators.”
PCWorld is reporting that Reliance said the deal was worth more than $11 billion in a filing to the Bombay Stock Exchange: “After the merger, the towers of Reliance's Reliance Infratel unit will be merged with those of GTL, though Reliance will continue to own its fiber optic network.”
Earlier this month, Reliance “approved a plan to sell a minority stake to a bidder like Etisalat, AT&T or MTN Group,” according to the Associated Press (News - Alert). The news sent its stock up as much as 6.5 percent.
Reliance’s board “approved selling up to a 26 percent equity stake to strategic or private equity investors, and gave the go-ahead for other strategic combination opportunities,” the AP reported, adding that talks with “Dubai-based Emirates Telecommunications Corp., or Etisalat (News - Alert), for a 26 percent equity stake to strategic or private equity investors, and gave the go-ahead for other strategic combination opportunities,” the AP reported, adding that talks with “Dubai-based Emirates Telecommunications Corp., or Etisalat, for a 26 percent stake sale valued around $4 billion,” were the most advanced now.
Bloomberg (News - Alert) BusinessWeek cites Kamlesh Bhatia, a principal research analyst at Gartner (News - Alert), saying that besides aiming to reduce its debt and raise more capital, Reliance will also be looking for an investor that will bring expertise in the area of operating 3G services.
PCWorld says for Reliance, selling off its tower business “is one of several plans being considered by the company to decrease its debt, and fund its expansion in a market where competition has driven down rates for voicecalls at times to below Indian rupees 0.01 (US$0.0002) per second. Previously, calls were charged by the minute.”
Demand for shared networks is now likely to go up as operators plan to roll out their 3G networks, according to analysts cited by PCWorld.
David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.
Edited by Alice Straight