Mukesh’s 4G dream to ride on Anil’s towers
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Muthu Ramadoss
Apr 18, 2012, 11:08:02 PM4/18/12
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Mukesh’s 4G dream to ride on Anil’s towers
By Anto T Joseph, Ravi Ranjan Prasad
Almost seven years after the
Reliance empire was split between the two bickering Ambani brothers in
2005, the two corporate giants are looking at ways to “cooperate” in the
telecom space.
People close to the development said Reliance Industries (RIL, of the Mukesh Ambani empire) has completed a process of identifying areas for potential cooperation with the younger brother group. On its part, Reliance Communications (RComm, of the Anil Ambani group) has responded positively to the overtures appears willing to share their infrastructure for the launch of RIL’s 4G telecom services.
While stock market continues to speculate the width and reach of the collaboration, both RIL and RComm have denied any such move. But despite the denials, the stocks of the two groups made substantial gains on Tuesday.
RComm gained 5.26 per cent on BSE to close at Rs 89 per share. Other Ambani stocks also made sharp gains following market speculation of the two brothers coming a bit closer. Reliance Infrastructure moved up by 6.03 per cent, Reliance Capital gained 5.56 per cent and Reliance Power 3.35 per cent.
“The vast customer base of RComm will help RIL to jump start its 4G services,” said one of the industry officials working closely on the project.
“RIL can also make use of hundreds of customer centres that RComm operates across the country to reach out to clients quickly. RIL doesn’t need to repeat KYC formalities,” the official said.
They have, however, categorically denied any financial deal is in the offing. “The two groups are likely to do business at an arms length for the time being, before initiating any move to bring it under one umbrella.” When contacted, an RIL spokesperson denied any move to identify segments for cooperation for its 4G launch. RComm didn’t respond to an e-mail sent to the company.
But according to people close to RIL’s telecom project, firm is not in a position to fix a launch date as a lot of loose ends are yet to be tied up. “As of now RIL has invited bids from IT biggies for doing the software backbone for the project. It is at request for qualification (RFQ) stage, and several companies, including Infosys, TCS and Persistent Systems are interested,” said one of the officials.
“With Bharti and Qualcomm launching 4G services, RIL has to sew up its basics quickly. It is unlikely that RIL will start services in any of its 22 circles by 2012-end.” S P Tulsian, who closely tracks RIL, said Mukesh Ambani would want Anil Ambani to exit from passive infrastructure such as the telecom tower business so that he could acquire RComm’s productive assets. “Mukesh Ambani is very much interested in acquiring his brother’s telecom business.”
Since January, there has been a lot of trading interest in Anil Ambani group stocks and they are among the top gainers so far this calendar year, according to Tulsian.
Market grapevine has it that RIL’s launch of 4G services is drawing closer and it may use RComm’s existing telecom infrastructure, at least initially. The fact that RIL has not set up any infrastructure so far for launching 4G operations also gives credence to this view.
Ankita Somani, IT and telecom associate Angel Broking, said, “We are neutral unless it is officially announced. RIL-Anil Ambani group cooperation will not be before the third quarter or so. What if RComm bids for more 2G spectrum? This will mean more financial liability. The stock has moved up in the past too on rumours of an initial public offering and sale of the tower business,” Somani said.
“For the past four or five quarters, RComm’s performance has not been very impressive in terms of operational income,” she said.
People close to the development said Reliance Industries (RIL, of the Mukesh Ambani empire) has completed a process of identifying areas for potential cooperation with the younger brother group. On its part, Reliance Communications (RComm, of the Anil Ambani group) has responded positively to the overtures appears willing to share their infrastructure for the launch of RIL’s 4G telecom services.
While stock market continues to speculate the width and reach of the collaboration, both RIL and RComm have denied any such move. But despite the denials, the stocks of the two groups made substantial gains on Tuesday.
RComm gained 5.26 per cent on BSE to close at Rs 89 per share. Other Ambani stocks also made sharp gains following market speculation of the two brothers coming a bit closer. Reliance Infrastructure moved up by 6.03 per cent, Reliance Capital gained 5.56 per cent and Reliance Power 3.35 per cent.
“The vast customer base of RComm will help RIL to jump start its 4G services,” said one of the industry officials working closely on the project.
“RIL can also make use of hundreds of customer centres that RComm operates across the country to reach out to clients quickly. RIL doesn’t need to repeat KYC formalities,” the official said.
They have, however, categorically denied any financial deal is in the offing. “The two groups are likely to do business at an arms length for the time being, before initiating any move to bring it under one umbrella.” When contacted, an RIL spokesperson denied any move to identify segments for cooperation for its 4G launch. RComm didn’t respond to an e-mail sent to the company.
But according to people close to RIL’s telecom project, firm is not in a position to fix a launch date as a lot of loose ends are yet to be tied up. “As of now RIL has invited bids from IT biggies for doing the software backbone for the project. It is at request for qualification (RFQ) stage, and several companies, including Infosys, TCS and Persistent Systems are interested,” said one of the officials.
“With Bharti and Qualcomm launching 4G services, RIL has to sew up its basics quickly. It is unlikely that RIL will start services in any of its 22 circles by 2012-end.” S P Tulsian, who closely tracks RIL, said Mukesh Ambani would want Anil Ambani to exit from passive infrastructure such as the telecom tower business so that he could acquire RComm’s productive assets. “Mukesh Ambani is very much interested in acquiring his brother’s telecom business.”
Since January, there has been a lot of trading interest in Anil Ambani group stocks and they are among the top gainers so far this calendar year, according to Tulsian.
Market grapevine has it that RIL’s launch of 4G services is drawing closer and it may use RComm’s existing telecom infrastructure, at least initially. The fact that RIL has not set up any infrastructure so far for launching 4G operations also gives credence to this view.
Ankita Somani, IT and telecom associate Angel Broking, said, “We are neutral unless it is officially announced. RIL-Anil Ambani group cooperation will not be before the third quarter or so. What if RComm bids for more 2G spectrum? This will mean more financial liability. The stock has moved up in the past too on rumours of an initial public offering and sale of the tower business,” Somani said.
“For the past four or five quarters, RComm’s performance has not been very impressive in terms of operational income,” she said.
http://www.mydigitalfc.com/news/mukesh%E2%80%99s-4g-dream-ride-anil%E2%80%99s-towers-800
take care,
Muthu Ramadoss.
http://linkedin.com/in/tellibitz
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