RIL in talks with RCom over tower sharing
January 23, 2013
The long-rumored alliance between Reliance Communications and Reliance Industries, telecom companies run by the Ambani family, appears to be one step closer to reality.
RCom and RIL are engaged in preliminary-stage talks over a network sharing deal, Economic Times reported, citing executives aware of the negotiations.
RCom is India's third largest mobile operator. Its infrastructure arm, Reliance Infratel, owns around 48,000 towers across the country.
Reliance Industries is meanwhile making a re-entry into the telecom sector with plans to offer TD-LTE services starting from this year. The company spent $1.03 billion to acquire Infotel, a company with pan-India spectrum on the 2.3-GHz band, in June 2010.
This acquisition came one month after a non-compete agreement between Anil and Mukesh Ambani expired, allowing Mukesh to re-enter the telecom market. The non-compete pact was made after the billion brothers split up the family empire acrimoniously following their father's death in 2002. But the feud has been progressively dying down.
According to the Times' sources, a deal is likely to involve RIL agreeing to lease capacity on around 30,000 of Reliance Infratel's towers, likely at a substantial discount to the prevailing rate.
RIL has been rumored to be considering such a tower sharing arrangement since late 2011, and RCom is considered the front-runner..
But a deal is not a certainty, as RIL is reportedly also thinking of building over 100,000 of its own towers over the next two years, which would likely give it more than enough capacity.
Phil Marshall / Tolaga Research
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