Reliance Jio, RCom wireless assets deal a 'win-win' for both players

Reliance Communications has entered into an agreement to sell its wireless assets to Reliance Industries' telecom arm Reliance Jio, the Anil Ambani-led company said in a statement on Thursday. The transaction, which is subject to lenders' and other applicable approvals, will close in phased manner in January-March 2018.

As part of the deal Reliance Jio will take over Reliance Communications’ 4G spectrum in 800/900/1800/2,100 MHz bands, fibre optic cable spanning 1,78,000 km pan India and 43,000 towers.

While Reliance Communication will use the proceeds to pare its debt, Jio will benefit out of the deal as the newly procured assets will augment Jio's Fibre-To-Home which is expected to launch in 2018. The deal will also supplement Jio in its enterprise operations.

Commenting on the deal Rajan Mathews, DG of COAI said, “It is a good thing that it was bid out in a very transparent manner and the bidding shows that, the remaining players are very keen and are now strategic in nature in terms of going forward.”

“The emerging landscape of the three dominant players — Jio, Airtel and Vodafone-Idea combine — is going to be the landscape of the operator community going forward,” he added.

RK Upadhyay Former CMD, BSNL said, “the move was expected for long and it is a move in the right direction.”

The deal with RCom will certainly give Reliance Jio an advantage over Bharti Airtel and Vodafone as “their position will certainly be strengthened by acquiring this portfolio,” he said.

Former DoT Secretary and NASSCOM President, R Chandrashekhar said, “The deal is part of the whole ongoing consolidation and each player trying to have a presence across all the service areas – both in geographic sense and in terms of the kind of services that are offered.”

Mahesh Uppal of Com First India said: “The deal is particularly valuable to Reliance Jio as “when you try and combine assets of this kind, it is not simply additive, but sometimes even multiplicative because you do actually manage to make up for any kind of deficiencies in your network.”

HP Ranina, Corporate Lawyer lauded the deal and said it is a win-win deal for both. He said, “Mukesh Ambani through Reliance Jio is going to dominate the telecom sector and that is his whole intention of acquiring this particular thing from Anil Ambani group. Possibly, he will also acquire from other companies in the due course.”

He added, “Anil Ambani has made a good tactical move and it also benefits Reliance Jio. So, it is a win-win situation.”

Former Telecom and IT Minister Milind Deora said the deal is a healthy sign for the telecom sector. He said, “Telecom sector has been great for the consumer, the country and for our productivity over the last decade or so. Now, it is time for us to move into a more mature and evolved market as we see in many other parts of the world where you will have four or five large operators and there is bound to be consolidation. So, that is a healthy sign.”

He said, “There are still tremendous opportunities in India's telecommunication sector, but there is only room for four or five large telcos. So, consolidation was but natural and today is obviously a step in that direction.”

(Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.)