Ambanis cut Rs 1,200-cr telecom deal
Nearly eight years after the Ambani brothers parted ways, Mukesh and Anil are doing business again. Two of their telecom companies have signed a Rs 1,200-crore infrastructure-sharing agreement.
Mukesh Ambani-controlled Reliance Jio Infocomm has signed a Rs 1,200 crore deal to use the optical fibre network of Anil Ambani-backed Reliance Communications.
Reliance Jio will use RCom’s 1,20,000-km-long, nationwide optical fibre network to provide 4G services.
The Rs 1,200-crore deal is for the entire life of the optical fibre network. RCom will get reciprocal access to the optical fibre infrastructure that Reliance Jio may build in the future. The companies would also jointly upgrade the network to provide next generation services.
The agreement is the first in a series of deals between the companies. The next deal is likely to be for sharing RCom’s tower infrastructure and under-sea cable network.
In 2005, the Ambani brothers had split up, with Mukesh getting Reliance Industries and Anil taking control of RCom, power and infrastructure. The brothers had signed a non-compete agreement, which was amended in 2010.
That very year Reliance Jio, formerly Infotel Broadband, won spectrum to provide nationwide 4G services, marking Mukesh Ambani’s re-entry into the telecom sector.
The market gave the deal a thumbs-up, with Reliance Industries gaining over 2 per cent to close at Rs 794 on the National Stock Exchange, while RCom ended 11 per cent higher at Rs 63.45.