RCom has already transferred 12,000 towers to its tower subsidiary Reliance Telecom Infrastructure Ltd (RTIL) for Rs 3,000 crore.
MUMBAI: Reliance Communications (RCom), the country’s second-largest wireless operator, will add 20,000 towers in the current fiscal year. The company is also closer to selling stake in the spun-off tower business.
Highly placed sources said the company is planning to make an announcement on August 15 where it may make public its entire GSM plan and $1 billion investment to roll out GSM network in 15 more circles where it operates CDMA network.
RCom will be able to launch GSM services within a year of receiving spectrum and listing of its wholly owned subsidiary, Flag Telecom, on the London Stock Exchange will be made by the end of the second quarter of this fiscal. It was also further learnt that RCom is at the final leg for roping in strategic investors and private equity majors for its tower business.
RCom has already transferred 12,000 towers to its tower subsidiary Reliance Telecom Infrastructure Ltd (RTIL) for Rs 3,000 crore. The company plans $2.5 billion capital expenditure in the parent company to create active infrastructure. RTIL was a zero-debt company with a net worth of over Rs 3,000 crore, it can even raise debt of around Rs 2,000 crore.
Meanwhile, RCom emerges as the main service provider as its CDMA arm has been selected in 18 clusters and its GSM arm has been selected in 17 clusters for setting up towers in the government initiative plan to improve rural wireless penetration coverage in rural areas where no wireless or fixed line coverage currently. In 11 clusters, RCom will be operating both GSM and CDMA networks. BSNL has been selected in 15 clusters, while Bharti Airtel has been selected in five clusters.
Most domestic operators share passive infrastructure such as towers, generator sets and shelters.
On an average, 65% of domestic mobile operators’ capex is spent on passive infrastructure and only 35% is spent on active infrastructure. Operators such as Bharti share close to 25% of their sites. Site sharing, coupled with the lower costs of 2G equipment, has made the business case for rolling out rural networks attractive.
Meanwhile, RCom has finalised a deal with Alcatel-Lucent for supply of CDMA equipment used for mobile services.
The deal size is around $350 million and likely to be officially announced on Tuesday in Delhi.
This is the first major contract Alcatel-Lucent will be getting from India after the merger of French major Alcatel with US equipment vendor Lucent. Lucent had earlier supplied CDMA equipment to Reliance in 2004.
Analysts feel that at 10% mobile teledensity, telecom industry is bound to witness strong subscriber addition for the next few years and there is significant pent-up demand for mobile services in rural areas.
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