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Jan 17, 2013, 10.54 AM IST | Source: CNBC-TV18

RCOM's $1bn Alcatel deal likely to reduce investment risk

Reliance Communication (RCOM) has signed a USD 1 billion technology deal with Alcatel to manage RCOM's telecom networks for eight years in eastern and southern India. In an interview to CNBC-TV18, Gurdeep Singh, Pesident and CEO of wireless business of R Com share details related to the deal.

Reliance Communication ( RCOM ) has signed a USD 1 billion technology deal with Alcatel to manage RCOM's telecom networks for eight years in eastern and southern India. In an interview to CNBC-TV18, Gurdeep Singh, Pesident and CEO of wireless business of RCOM share details related to the deal.

Singh said that the contract will have wireless, wireline, enterprise, fiber and all the utility operations covered into it. "It reduces investment risk because a lot of your costs are predictable and are linked to the customer experience. It is a first of its kind end-to-end management of the network, perhaps the largest globally," adds Singh.

Below is an edited transcript of Gurdeep Singh's interview on CNBC-TV18

Q: In terms of the incremental revenues that RCOM will clock in from this deal, by when will this flow into the top-line and what is the incremental revenue, can you quantify that for us?

A: What this end-to-end contract brings to us is seamless experience that our consumers can go through in the emerging data world. The cost effectiveness is two layers. One is you have predefined Service Legal Agreements (SLAs), which are linked to the superior customer experience delivery and at the same time you put into the network new processes, new tools and upgrade the technology from time to time.

It reduces investment risk because a lot of your costs are predictable and are linked to the customer experience. This allows RCOM to promise and deliver superior customer experience and hence result in attracting high value customers including corporates in the enterprise and move the top-line while remaining cost effective.

Q: Can you quantify how much would this flow in terms of EBITDA, in terms of the incremental capital or revenue that you will be able to increase or clock in from this?

A: I am afraid I will not be able to share at this moment.

Reliance Comm stock price

On July 24, 2014, Reliance Communications closed at Rs 134.40, down Rs 0.8, or 0.59 percent. The 52-week high of the share was Rs 164.45 and the 52-week low was Rs 105.80.


The company's trailing 12-month (TTM) EPS was at Rs 3.04 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 44.21. The latest book value of the company is Rs 141.70 per share. At current value, the price-to-book value of the company is 0.95.

READ MORE ON  RCOM, Alcatel, wireless, SLAs, investment , EBITDA
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