Millennium Post

Ambani bros in Rs12,000-cr deal to share telecom towers

In the biggest deal since their reconciliation, Ambani brothers on Friday announced a Rs 12,000- crore deal, wherein Mukesh will use towers owned by a firm run by his younger sibling Anil for launch of his telecom venture. Reliance Industries' telecom arm will lease up to 45,000 mobile masts from Anil Ambani-led Reliance Communications in a deal valued at more than Rs 12,000 crore over the lifetime of the contract, the two groups announced on Friday.
Hiring of phone towers will help accelerate fourth- generation (4G) broadband service by Reliance Jio Infocomm, a unit of elder brother Mukesh's RIL.

The second deal between the brothers in as many months will give an estimated Rs 800 crore per annum additional revenue to Anil's Reliance Communications assuming a 15 year tenure of the deal.

The deal comes a day after Mukesh told shareholders in Mumbai that workforce at Reliance Jio will be more than tripled to 10,000 as the company prepares to start the services.
'Under the terms of the agreement, Reliance Jio Infocomm will utilise up to 45,000 ground and rooftop based towers across RCom's nationwide network for accelerated roll-out of its state-of-the-art 4G services,' the two groups said in separate but identical statements. Reliance Jio Infocomm is the only company which in 2010 won a pan-India spectrum for 4G services but is yet to start commercial services.

The deal comes two months after the Ambani brothers had struck their first commercial deal when Mukesh agreed to hire Anil's optic fibre network for launch of his telecom venture. The pact was valued at Rs 1,200 crore.

The latest agreement also allows the two companies to jointly build more towers at new locations, they said.
RCom has been staggering under a debt of more than $ 6 billion and the pact with Reliance Jio will help cut its debt.
The agreement announced today provides for 'joint working arrangements to configure the scope of additional towers to be built at new locations to ensure deep penetration and seamless delivery of next generation services,' the statements said.

This pact follows the inter-city optic fibre sharing agreement already signed in April 2013 as part of a comprehensive framework of business co-operation between Reliance Jio Infocomm and Reliance Communications, it added.
On the BSE, shares of RIL ended 0.97 per cent lower at Rs 784.60 while RCom lost 1.40 per cent to Rs 116.40.
The brothers have increased their corporate collaboration since they publicly signalled the end of their dispute with a joint appearance in December 2011 to dedicate a memorial to their late father in his home town of Chorwad in Gujarat. When they announced the truce, they also scrapped an agreement not to compete in each others' sectors —which allowed Mukesh to re-enter telecom business.
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