Reliance Communications Expects To Seal Mobile Tower Deal In 2 Weeks

Reliance Communications Ltd (RCom) expects to reach a deal to sell its mobile phone masts business to a group of companies led by buyout firm TPG Capital Management LP in the next two weeks, its chief executive said on Monday (25 January).

RCom last month signed a non-binding pact to sell the business to TPG and Tillman Global Holdings LLC, a US firm that invests in telecom and energy infrastructure businesses.

Sources had told Reuters RCom expected an enterprise value of about Rs 23,000 crore ($3.5 billion) for the unit, which has a portfolio of about 45,000 masts.

The asset sale is part of RCom's efforts to pare some of its Rs 40,479 crore ($5.97 billion) as of end-December in debt on its books, as India's fourth-biggest wireless mobile phone carrier looks at deploying cash towards improving its network.

RCom, controlled by billionaire Chairman Anil Ambani, on Friday posted a 14.9 per cent drop in its quarterly net profit, as cut-throat competition for customers in a crowded mobile phone market squeezed margins.

India is the world's second-biggest market for mobile phone users but tough competition has led to low margins for voice services, and telecom providers are banking on more lucrative data services to lift earnings in the coming years.

RCom Chief Executive Vinod Sawhny said on Monday the company had increased its capital expenditure outlook for this fiscal year that ends on March 31 by Rs 1,000 crore to Rs 4,000 crore to expand its 3G coverage in the country.

(Reuters)