ID :
127454
Sat, 06/12/2010 - 06:57
Auther :
Shortlink :
https://oananews.org//node/127454
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Mukesh enters telecom; buys BWA winner Infotel for Rs 4,800 cr
New Delhi, June 11 (PTI) Mukesh Ambani-led RIL Friday
entered the telecom arena, hitherto forbidden to it, with a
bang, announcing a Rs 4,800 crore acquisition of Infotel that
only hours earlier emerged as the sole winner of pan-India
broadband spectrum.
The acquisition of 95 per cent stake, through fresh
equity infusion, values Mahendra Nahata group's Infotel at
over Rs 5,000 crore, follows a truce arrived at between Mukesh
and his younger brother Anil on May 23 wherein the warring
brothers scrapped a non-compete agreement to allow each
other's business flexibility.
As a result of the acquisition, it would be imperative on
part of cash-rich RIL to pay the government Rs 12,872 crore
within this month for pan-India spectrum won by Infotel, but
no official comment was made on this aspect.
RIL is the largest profit making private company in the
country clocking a net of Rs 16,236 crore in 2009-10 and has a
net worth of Rs 137,171 crore, with its Chairman Mukesh known
for creating large capacities as his business model.
The company has cash and cash equivalent of Rs 21,874
crore as on March 31, 2010.
Announcing the deal, RIL Chief Mukesh Ambani said: "We
see this as a next wave of value creation opportunity in the
wireless broadband space. We believe this will pole-vault
India's economy into the digital world at an accelerated pace
while creating next generation tools that will enhance
productivity and create world class consumer experiences."
The deal was announced shortly after Infotel became the
only pan-India bidder to acquire 20 MHz broadband spectrum at
the end of the 16-day long auction this morning.
Infotel promoter-director Anant Nahata said: "We were in
talks with RIL even before the auction for BWA started."
After the twin announcement of spectrum auction and
acquisition, RIL shares shot up by over three per cent to Rs
1046.25 a share, while Nahata group companies HFCL and
HFCL-Infotel hit the upper circuit of five per cent with their
shares soaring to a high of Rs 11.39 and Rs 10.14
respectively.
Another Nahata group firm Datacom had acquired pan-India
2G telecom licence in 2008 with support of Videocon which had
paid the licence fee of Rs 1,658 crore. Mahendra Nahata later
exited the company for an estimated Rs 1,200 crore.
There are also speculation that RIL could be interested
in buying into Videocon Mobile, which as such is looking for a
strategic partner.
Though there is no confirmation on this, Mukesh Ambani's
love for telecom business is no secret as it was he who
created Reliance Infocomm (now Reliance Communications) -- a
business that went to younger brother Anil as part of family
settlement in 2005.
After the deal, RIL said in a statement: "RIL will invest
about Rs 4,800 crore by way of subscription to fresh equity
capital at par to be issued by Infotel Broadband. Post this
investment, RIL will own 95 per cent of the equity and infotel
will be a subsidiary of RIL."
RIL said that BWA services can provide an opportunity to
the company to be in the forefront across the world, providing
world-class 4G networks and services.
"A single 20 MHz spectrum when used with Long Term
Evolution (generally known for 4G technology) has the
potential of providing greater capacity when compared to
existing communication infrastructure in the country," the
company said.
Nahata promoted Infotel Broadband has an Internet Service
Provider (ISP) Category-A licence.
India has witnessed substantial growth in the mobile
subscriber base over the last decade. This provides a ready
platform for offering various data services which is currently
at a very nascent stage, RIL said.
"RIL's initiative will usher in a wireless broadband
revolution in both, the urban and the rural areas all across
the country by providing end-to-end data solutions for
business enterprises, social organisations, educational and
healthcare institutions and Indian consumers," RIL said.
RIL will forge several strategic relations with a host of
leading global technology players, service providers,
infrastructure providers, application developers, device
manufacturers and others to leapfrog India to the 4G
revolution.
"RIL will comply with non-compete and trademark agreement
entered into at the time of corporate demerger and subsequent
modification made last month," RIL statement added. PTI SKB
entered the telecom arena, hitherto forbidden to it, with a
bang, announcing a Rs 4,800 crore acquisition of Infotel that
only hours earlier emerged as the sole winner of pan-India
broadband spectrum.
The acquisition of 95 per cent stake, through fresh
equity infusion, values Mahendra Nahata group's Infotel at
over Rs 5,000 crore, follows a truce arrived at between Mukesh
and his younger brother Anil on May 23 wherein the warring
brothers scrapped a non-compete agreement to allow each
other's business flexibility.
As a result of the acquisition, it would be imperative on
part of cash-rich RIL to pay the government Rs 12,872 crore
within this month for pan-India spectrum won by Infotel, but
no official comment was made on this aspect.
RIL is the largest profit making private company in the
country clocking a net of Rs 16,236 crore in 2009-10 and has a
net worth of Rs 137,171 crore, with its Chairman Mukesh known
for creating large capacities as his business model.
The company has cash and cash equivalent of Rs 21,874
crore as on March 31, 2010.
Announcing the deal, RIL Chief Mukesh Ambani said: "We
see this as a next wave of value creation opportunity in the
wireless broadband space. We believe this will pole-vault
India's economy into the digital world at an accelerated pace
while creating next generation tools that will enhance
productivity and create world class consumer experiences."
The deal was announced shortly after Infotel became the
only pan-India bidder to acquire 20 MHz broadband spectrum at
the end of the 16-day long auction this morning.
Infotel promoter-director Anant Nahata said: "We were in
talks with RIL even before the auction for BWA started."
After the twin announcement of spectrum auction and
acquisition, RIL shares shot up by over three per cent to Rs
1046.25 a share, while Nahata group companies HFCL and
HFCL-Infotel hit the upper circuit of five per cent with their
shares soaring to a high of Rs 11.39 and Rs 10.14
respectively.
Another Nahata group firm Datacom had acquired pan-India
2G telecom licence in 2008 with support of Videocon which had
paid the licence fee of Rs 1,658 crore. Mahendra Nahata later
exited the company for an estimated Rs 1,200 crore.
There are also speculation that RIL could be interested
in buying into Videocon Mobile, which as such is looking for a
strategic partner.
Though there is no confirmation on this, Mukesh Ambani's
love for telecom business is no secret as it was he who
created Reliance Infocomm (now Reliance Communications) -- a
business that went to younger brother Anil as part of family
settlement in 2005.
After the deal, RIL said in a statement: "RIL will invest
about Rs 4,800 crore by way of subscription to fresh equity
capital at par to be issued by Infotel Broadband. Post this
investment, RIL will own 95 per cent of the equity and infotel
will be a subsidiary of RIL."
RIL said that BWA services can provide an opportunity to
the company to be in the forefront across the world, providing
world-class 4G networks and services.
"A single 20 MHz spectrum when used with Long Term
Evolution (generally known for 4G technology) has the
potential of providing greater capacity when compared to
existing communication infrastructure in the country," the
company said.
Nahata promoted Infotel Broadband has an Internet Service
Provider (ISP) Category-A licence.
India has witnessed substantial growth in the mobile
subscriber base over the last decade. This provides a ready
platform for offering various data services which is currently
at a very nascent stage, RIL said.
"RIL's initiative will usher in a wireless broadband
revolution in both, the urban and the rural areas all across
the country by providing end-to-end data solutions for
business enterprises, social organisations, educational and
healthcare institutions and Indian consumers," RIL said.
RIL will forge several strategic relations with a host of
leading global technology players, service providers,
infrastructure providers, application developers, device
manufacturers and others to leapfrog India to the 4G
revolution.
"RIL will comply with non-compete and trademark agreement
entered into at the time of corporate demerger and subsequent
modification made last month," RIL statement added. PTI SKB
