There are reports that Reliance Jio Infocomm to buy Reliance Communications’ wireless assets for a total value of nearly 240 billion rupees ($3.75 billion).
Reliance Communications had announced that it would sell all its spectrum, tower, fiber optic, and other telecom infrastructure assets to Jio, which is owned by Reliance Industries. Though the value of the deal was not disclosed by any of them.
This deal marks the return of the telecom operations back into the fold of Reliance Industries, which forayed into telecom in 2002.
Reliance Communications has stated that it is retreating from the consumer telecom space to focus on its enterprise business. The company has announced a new plan to slash its debt pile by 390 billion rupees ($6.09 billion) without any haircut by the banks, leaving it with only around 60 billion rupees in debt.
As per the analysts, the deal would allow Jio to further expand into India’s telecom space, though it would also add to its debt. This acquisition of Reliance Communications’ telecom infrastructure should bring synergies and lower costs while raising clarity on growth Capex. The deal could potentially raise balance sheet leverage by 10-12 percent near term, as per the analysts.
Reliance Jio is India’s fastest-growing telecom company with a subscriber base of close to 140 million. With this deal, Jio gets access to four bands of spectrum and 43,000 telecom towers, and a countrywide fiber-optic network.
Also, Read:-Reliance Jio to focus on customers than tariff plans
