Reliance Communications Ltd. (RCom) is acquiring Digicable, India’s largest cable TV service provider, in an all-stock deal in its second deal in the last one week. Anil Ambani-led RCom will give shareholders of Digicable stock of the new entity which will be called Reliance DigiCom.
The deal would also give Ashmore, which reportedly held a 49% stake in Digicable, shares in the combined entity. Digicable is promoted by cable industry pioneer Jagjit Singh Kohli along with Yogesh Shah.
Reliance Infratel, where RCom held a 95% stake, and GTL Infrastructure on Sunday agreed to a Rs 50,000 crore ($11 billion) deal which involves India's second-largest telecom company by subscribers to sell its telecom infrastructure arm.
Reliance Digicom will be an integration of RCom’s DTH, IPTV and retail broadband operations, with Digicable. This will be India’s and Asia’s largest, and the world’s fifth largest company, to offer the full-suite of triple play services – digital TV, ultra high-speed broadband and voice.
The combined entity will reach 11 million homes market leadership in 110 towns, including top 6 metros with a 16% subscriber market share of pay TV homes. The distribution reach is expected at 1 lakh retail outlets in 7,000 towns and 10,000 cable operators.
“With this game changing move, we hope to lead the next revolution in digital home entertainment in India, by offering a world class TV experience and ultra high speed broadband capability to a billion people," said Anil D. Ambani, Chairman of Reliance Communications. "The new company, Reliance DigiCom, will fuel our ‘4-screen strategy’ to own mobile, cinema, TV and computer screens, that are rapidly becoming an integral part of our customers’ daily lives, leading to world-class convergence of information, communication and entertainment solutions and services.”
The deal is also likely to help ADAG group's foray into the television broadcasting business with distribution network across channels. Reliance Broadcasting Network recently formed a joint venture with US-based media house CBS Corp. to launch English and regional language channels in India.