GTL Infrastructure: Reliance Communications Tie-Up

more images

MUMBAI, INDIA (GaeaTimes.com)- In a latest development, India’s second largest mobile operator Reliance Communications has declared that it will sell its tower business operations to a company named GTL Infrastructure Ltd. The company thinks that it will result in the creation of the largest telecom infrastructure firm of the world which is not managed by a telecom operator. The exact financial terms have not been revealed so far but the worth of the combined company will be more than $11 billion. It would own over 80000 towers in the country, as per Reliance Communications.

Anil Ambani led Reliance Communications is reeling under the burden of debt and the new deal will offer the company a way to solve this menace. As per the new deal, Manoj Tirodkar, the GTL Infrastructure Chairman will own 35 percent of the merged tower business. 26 percent of the new entity will be owned by Reliance ADA Group while the shareholders will own the remaining part. The cellular industry in India is getting only more competitive with time and the entry of new player has made the older ones resorting to new strategies to race ahead. The market analysts are of the opinion that the new merger is a part of the initiatives taken by Reliance Communications to obtain a strong balance sheet with minimal debts.

As part of the deal with GTL Infrastructure Ltd, Reliance Communications will get cash and retain its assets and optic fibre network. A source close to the company said that the new deal may reduce the debt of Reliance Communications by half.