Anil Ambani’s RComm gets a lifeline from brother Mukesh Ambani’s Jio as first phase of asset sale is completed
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- In the last week,
Reliance Communicationshas sold ₹50 billion worth of telecom assets to Reliance Jioas part of a plan to reduce debt.
- The deals comprise the first tranche of a larger agreement, signed in December 2017, for the sale RComm’s entire fibre and tower network, and most of its mobile spectrum.
- The deal is symbolic of the converging fortunes of the two brothers. The price war initiated by Reliance Jio’s entry was the final nail in the coffin for RComm.
The deals comprise the first tranche of a larger agreement, signed in December 2017, for the sale RComm’s entire fibre and tower network, and most of its mobile spectrum. This includes the sale of 120 MHz of 4G spectrum, over 40,000 towers, nearly 180,000 kilometres of fiber and 248 MCNs. RComm will use the proceeds of the the agreement to reduce its heavy debt burden, which was estimated to total a staggering ₹460 billion last year.
The agreements are a crucial component of RComm’s plan to monetise ₹250 billion worth of assets and the unsustainable portion of its debt obligations. In a cruel twist of fate, RComm is selling its telecom assets to the very company that forced it out of business in the first place after it struggled to find buyers.
A tale of two telecom companies
The deal is symbolic of the converging fortunes of the two brothers. Following its launch in September 2016, Reliance Jio has disrupted the Indian telecom market by reducing rates, onboarding customers in droves and forcing competitors to speed up their innovation. Of course, it helps that the company is funded with the war-chest of
Meanwhile, RComm has faced a completely different trajectory.