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Etisalat-RCOM Sign Rs 10,000 crore Tower Sharing Deal

22 July, 2009

Etisalat DB, a leading telecommunications company in the Middle East and its subsidiary would outsource their telecom infrastructure requirements for the 15 telecom circles, encompassing end-to-end tower and transmission infrastructure to Reliance Infratel Limited and Reliance Communications Limited, the companies announced today.This passive infrastructure sharing agreement will accelerate Etisalat DB Telecom’s forthcoming roll-out of telecom services in India.

Etisalat DB has prior connections to India. Recently, it acquired a 45% stake in new telecoms player Swan Telecom. This is the second major tower sharing deal in the country in recent months. Earlier this year, Norway’s Telenor had signed a infrastructure sharing deal with the Tata-Quippo combined tower co. Also, top mobile firm Bharti Airtel, Vodafone Essar and Idea Cellular have formed a joint venture that has more than 100,000 towers.

A press statement said that this agreement presents large cost optimization benefits with an asset light model, improvement in capital productivity and enhances RCOM group revenues by Rs 10,000 crores. The agreement with Reliance Communications Group is the first and the largest Telecom Infrastructure sharing including Towers and Transmission agreement of its kind in the Indian Telecom landscape and strongly complements Etisalat DB Telecom’s plans for India. 
 
Commenting on this agreement,  Mohammad Hassan Omran, Chairman Etisalat said, “This significant development is part of our overall commitment to provide consumers with quality service and reach at the time of launch. As a new entrant in this dynamic market, this alliance provides us with key, strategic advantages that will ensure a robust, speed to market and cost-effective roll-out of services.” 
 
Anil Dhirubhai Ambani, Chairman, Reliance ADA Group said, “We are pleased to partner with Etisalat DB through this landmark agreement that will re-define the future of Indian Telecom sector. This win-win agreement demonstrates Reliance Communications capabilities to enable the operators to go-to-market with a bouquet of telecom infrastructure services. This will ensure a faster rollout, optimum costs and a time to market advantage. ” 
 
Etisalat has operations in Asia, Middle East and Africa. Etisalat DB Telecom Pvt. Ltd. is a joint venture between Etisalat and Dynamix Balwas Group. Etisalat DB and its subsidiaryhas  the Unified Services Access License in 15 circles in India. 
 
Top mobile firm Bharti Airtel, Vodafone Essar and Idea Cellular have formed a joint venture that has more than 100,000 towers.
 
Telecom tower companies have also attracted interest from foreign investors. New York-listed American Tower in March agreed to acquire Indian tower firm Xcel Telecom in its bid to expand in the world’s fastest-growing mobile market. Bharti Airtel’s tower unit has raised $1.35 billion by selling stake to private equity firms, while institutional investors own 5 percent of the Reliance Infratel unit.

 


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1 Comment
Nitin Jain . 6 years ago

Either Reliance Communications is too dumb to understand the gravity of what’s going on or they are simply ignoring the facts. I dont understand why the have not responded to so many questions about their revenue numbers or the audit issue and are instead scorching on such deals. Is it because they want to pull the attention away from something that they dont have an answer for or are they trying to hide something?

For the last Seven Quarters starting 30th June, 2007 and ending 31st December, 2008, the numbers for RCom and its peers tell the following tale: Reliance Communications % change in subscribers over seven quarters 96% % change in revenues over seven quarters 5% TTSL % change in subscribers over seven quarters 81% % change in revenues over seven quarters 23% Bharti Airtel % change in subscribers over seven quarters 104% % change in revenues over seven quarters 63% Vodafone Essar % change in subscribers over seven quarters 102% % change in revenues over seven quarters 56% Idea Cellular % change in subscribers over seven quarters 127% % change in revenues over seven quarters 68% One of the most dominant players in the Telecom sector is showing a increase in subscriber base of 96%, but a corresponding change in revenue of only 5%, when peers have an increase in revenue of as much as 4 times. Apert from this, there is the audit issue by TRAI and discrepancy between numbers reported to TRAI vs Annual Report which is close to Rs 7000 crore.

Etisalat-RCOM Sign Rs 10,000 crore Tower Sharing Deal

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