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Reliance rival to compete in Indian telecoms
14 June 2010
Indian oil and gas company Reliance Industries is to compete against former sister company Reliance Communications after buying a broadband operator
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Reliance
India
RIL
Ambani
Reliance Communications
Infotel Broadband Services
Indian group Reliance Industries is to re-enter the telecoms market — competing against Reliance Communications — by acquiring Infotel Broadband Services, one of the victors in the Indian spectrum auctions.
Reliance Industries is controlled Mukesh Ambani, the brother of Anil Ambani, who runs rival Reliance Communications. The two siblings split the Reliance empire in 2005 and agreed to remain in separate business sectors, but that agreement has now ended. The company was founded by their father, Dhirubhai Ambani, who died in 2002.
Reliance Industries — mainly focused on oil and gas — will spend $1 billion on a 95% stake in Infotel, which will function as a unit of RIL.
Infotel Broadband Services, which is operated by Mahendra Nahata, is the only provider to win broadband spectrum in all 22 zones in India in the recent auction. Reliance will pay $2.7 billion for the spectrum fee.
Reliance Industries is likely to invest $5 billion in about two years from now, as it completes its telecom rollout for broadband access across India.
The company will lease towers and other passive infrastructure from existing players. The company expects to have 100 million subscribers in five years. GTB