RCOM Jio Deal Will Help Former Gain Technological Edge

NEW DELHI - Nov. 16, 2016 - PRLog -- Reliance Communication, led by Anil Ambani, had a major chunk of debt in their books. However the mastermind strategized a plan to reduce the debt that remained outstanding. The telco giant's leader managed to cut down the debt by a greater extent through selling the stakes in tower unit to US based company named Brookfield as a part of series of deals which also includes the merger between Aircel and RCOM. The unnamed entity created is said to formulate India's fourth biggest telecom company.

"We set an aggressive goal for RCom, to reduce debt from Rs 42,000 crore to zero. With the proposed Aircel transaction and the Brookfield towers deal, we will already be at around Rs 15,000 crore debt, down by over 70%,"Anil Ambani said in a conversation. "Had we sold 100% of the towers business, our debt would have been near zero —our target." The outstanding interest liability that remains will be much more easily manageable.

Few years back when Reliance Group was falling short on expectations and required immediate planning and action, Anil Ambani applied his father Dhirubhai Ambani's strategy of finding opportunity in adversity leading to a two-prolonged strategy.  Anil had two options – one was of consolidation and second to sign an agreement with Mukesh Ambani's Reliance Jio on spectrum sharing.

"We at RCom recognised the opportunity to embark on a strategic partnership with a major player like Jio," Ambani said. "We have now implemented a comprehensive agreement with Jio to trade and share our gold standard 850 MHz spectrum, and also share infrastructure of towers and fibre."

Anil Ambani believes that the agreement with Jio will lead to savings while gaining a technological edge.

He added, "In a capital-intensive industry like telecom, this has converted our business model into an asset-light model for future growth, and saved the company billions of dollars, and given us access to a full next-generation 4G network on a pan-India basis."

Reference link: http://preciousmetalsmarkets.blogspot.in/2016/10/deal-wit...