RIL, RCom in talks for mobile tower sharing deal
22 Jan 2013
Anil Ambani's Reliance Communications Ltd (RCom), struggling to shore up its bottom line, is in talks with his brother Mukesh Ambani's Reliance Industries Ltd (RIL) to lease out capacity in some of the mobile signal towers owned by Reliance Infratel Ltd, an arm of Reliance communications.
Reliance Industries is planning to roll out 4G (fourth generation) high speed mobile data services.
According to reports, the talks the two sides are at a preliminary stage, and are focussed largely on pricing with RIL seeking to strike a hard bargain."
There has been considerable rapprochement between the brothers in recent months, after years of often bitter rivalry since they carved up the original Reliance industrial empire between themselves in 2005.
The tower deal is expected to be a winner for both – RIL will get infrastructure on the ground at a cheaper cost than setting up its own, while RCom gets to clean up its debt-riddled balance sheet by hundreds of crores per year.
Each telecom company or tenant putting up a base station on a telecom tower pays around Rs35,000 per month as rent. Reliance Infratel owns around 50,000 towers and has an average of 1.74 tenants per tower – which is the so-called tenancy ratio.
