Reliance Communications Sells Stakes To EtisalatBy Ritika Bhuwalka, Gaea News Network
Friday, June 18, 2010
MUMBAI, INDIA (GaeaTimes.com)- Abu Dhabi based company Etisalat was reported to have been in talks with a mobile operating company in India. The latest news is that Etisalat has bought a large stake in the Reliance Communications in India. The two companies have reportedly signed a $3.8 billion deal. Reliance Communications is India’s second largest mobile operator, so it is expected that the recent buy-out will benefit the Etisalat to a large extent. It may well put the Emirates Telecommunications Corporation, as Etisalat is also known as, on top of the list featuring the world’s most successful mobile operators.
The deal however will benefit not only Etisalat but also Anil Ambani, the billionaire owner of Reliance Communications, who has been facing quite a tough time in the recent past, with his company landing into very high debts. This venture will bring back the much needed money into the coffers of Reliance Communications. $3.8 billion is definitely no small amount.
The shares of Reliance Communications were one of the worst performing ones in the Mumbai share markets, but they showed a 11% rise previous Wednesday. Etisalat was following shortly behind with just 0.5% below. Business analysts all over India are of the opinion that not only Reliance Communications but many other companies may sell their stakes to a foreign one in order to get over the debt that they have landed in during the recession period. The population of India is huge and the country boasts of 600 million subscribers, so companies like Etisalat are looking for opportunities to enter the telecom industry of the country. Their deal with Reliance Communications is just the beginning.