Shyam closes in on Rs 5,000 cr infra-sharing deal with RTIL

In what could be the first active infrastructure sharing arrangement in the country, Russian communications major Sistema-controlled Shyam Telecom is learnt to be in advanced talks with Reliance Telecom Infrastructure Ltd (RTIL), Reliance Communications’ hived off tower arm, for a Rs 5,000-crore deal spread over 10 years.

As per the arrangement, Shyam Telecom will offer mobile services by riding on RTIL’s infrastructure—both active and passive—for 10 years. Shyam was recently allotted CDMA start-up spectrum across 12 circles, covering 16 states.

This deal will enable the CDMA operator to launch operations without setting up its own network. The Shyam-RTIL model could be the first of more such deals as new entrants try to save on time taken to set up and roll out networks across the country.

Other new players such as Datacom, Unitech, S Tel and Loop Telecom are also learnt to be exploring such business models, which offers them ready-to-use quality telecom infrastructure, which in turn, enables them to reduce their time-to-market and accelerate their network deployment. Industry experts say that roll-out dates can be advanced by as much as 8 - 12 months if new players adopt this model.

The entry of several new players, which opens the potential for many such infrastructure sharing deals in the coming months may also result in stand-alone tower firms such as RTIL, Indus (a tower JV between Bharti, Vodafone and Idea) and Bharti Infratel justifying their high valuations.

Read more in The Economic Times article.

RCOM to offload 10% in tower arm via IPO

Reliance Communications is likely to list its tower arm — Reliance Telecom Infrastructure Ltd (RTIL) — by March. The company which has already offloaded 5% stake in RTIL to outside investors, plans to sell an additional 10% in the company through an IPO.

The valuation of the company as per its 5% equity placement in July to seven institutional investors from the US, Europe and Asia was about Rs 27,000 crore. It is also learnt that the promoters (Reliance Communications) will sell shares and therefore there would not be a fresh issue of equity.

RCOM’s primary competitor Bharti Airtel, which is currently in the process of transferring its mobile telecom towers and related infrastructure to Bharti Infratel, has already prepared a road map which would allow the company to divest a majority stake in its tower arm in the future.

After the completion of the demerger, Infratel will enter into comprehensive sharing agreements with other service providers while Bharti in time would divest a majority stake and may also go for an IPO, thus making it a completely independent company, Bharti Airtel chairman Sunil Mittal said.

RCom sells 5% stake in tower biz -Video

Anil Ambani, chairman, Reliance Communications, today announced unlocking value of the tower company, Reliance Telecom Infrastructure, by selling 5% stake based on a valuation of Rs 27,000 crore.

The value of the tower business has been pegged at Rs 135 per share, Ambani said.The transaction will result in a cash inflow of Rs 1,400 crore.Ambani said that more infrastrcture was needed to keep adding over seven million customers per month.

The company would have 100,000 tenancy rights by March 2008, he added.

RCOM to offload stake in Flag Telecom

Reliance Communications (RCOM), the country’s second-largest wireless company, will adopt a three-pronged approach to unlock value for its shareholders.

RCOM will adopt a three-pronged approach to unlock value for shareholders and will also increase dividend payments to shareholders steadily.The company is in an advanced stage of selling a minority stake in Reliance Telecom Infrastructure India Ltd, its towers unit, to financial investors.

The company also plans to list the telecom tower unit on the local bourses. In the past four years, it has set up 14,000 towers and targeted 23,000 towers by the end of current calendar year.

Read more in The DNA Money article.

9 giants in race for RCoM's tower biz

As many as nine investors are currently in talks with Reliance Communications (RCOM), the country’s second-largest wireless service provider, for picking up a minority stake in its telecom infrastructure business. RCOM is currently in the process of spinning off its telecom infrastructure into a separate company — Reliance Telecom Infrastructure Limited (RTIL).

According to RCOM sources, the companies that are currently engaged in carrying out due diligence of RTIL include global tower infrastructure majors— Tower Vision and American Towers, private equity investors—Apax Partners; Carlyle; and Temasek, the private equity arms of HSBC and Deustche Bank, and financial investors—George Soros, Blueridge and US-based Tiger.

The company is looking to divest up to 26% stake in RTIL to strategic investors and has been in negotiations with many investors over the last 2-3 months. Sources in the industry say the deal could be in the range of $1 billion for a minority 26% stake in the telecom major’s tower business, pegging the valuation of the tower company at $4 billion.

Read more in The Economic Times article.

Rel Comm to list Flag, tower biz in 6 months

Reliance Communications is looking at unlocking value for shareholders through an array of activities including listing its wholly-owned subsidiary, Flag Telecom, and the recently spun-off tower business. It has also earmarked a capital expenditure of Rs 10,000 crore for the current financial year.

Addressing the media today, Anil Ambani, chairman, Reliance Communications said: "We are looking at unlocking shareholder value through various modes like the listing of Flag Telecom and tower business or by roping in strategic investors and strategic partners or private equity majors. We will do this in the next six months."

Reliance Telecom Infrastructure was spun-off into a separate entity with the tower business in oder to reduce set-up and operating costs resulting in cost efficiencies and providing greater financial flexibility. It has 12,000 towers and a networth of Rs 3,000 crore. The company is planning to set up another 8,000 towers, increasing its total number of towers to 20,000 by next year.

Ambani said the expansion plans of the company would be funded through debt, “which would be non-recourse to Reliance Communications”.

The company has also announced a capital expenditure of Rs 10,000 crore for both CDMA and GSM operations. This would also include foray into 3G and 4G technologies, while the company is expecting releasing of spectrum by the end of this quarter.