Why is Reliance selling its mobile phone masts business?
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India's fourth-biggest wireless mobile phone carrier Reliance Communications’ (RCom) CEO Business Insider answers your questions on the mobile tower deal.
What’s cooking?
India's Reliance Communications (RCom) is selling off its mobile phone masts business iin the next two weeks to a group of companies led by the buyout firm TPG Capital Management LP.
Who are buying it?
TPG Capital and Tillman Global Holdings LLC, a U.S. firm that invests in telecoms and energy infrastructure.
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How much money are we talking about?
Close to $3.5 billion in total for the 45,000 masts.
Why do they have to sell?
This is a part of RCom's efforts to recover some of its whopping $5.97 billion debt as of end-December.
The Anil Ambani led company posted a 14.9% drop in its quarterly net profit last Friday.
It is also investing heavily on upgrading its network at the face of tough competition.
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How much are they investing?
RCom CEO Vinod Sawhny has said that the company had hiked it’s investment on network by 10 billion rupees to 40 billion rupees for the fiscal year that ends on March 31st.
Why do they have to invest this big when they are in debt?
They have to. India boasts of the world's second largest smartphone user-base. However, it’s bogged down by low margins for voice services. Indian telcos are therefore betting big on premium services to cash in big in the years to come.
Image credit: Indiatimes
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