Companies run by brothers Mukesh and Anil Ambani yesterday announced a Rs 1,200 crore deal for cooperation in the telecom business. As per the deal, Mukesh Ambani-led Reliance Jio Infocomm will utilise Anil Ambani-led Reliance Communications’ optical fibre network for fourth generation (4G) telecom services.
Reliance Communications in turn will have reciprocal access to optic fibre infrastructure to be built by Reliance Jio in future. Reliance Jio is a subsidiary of Reliance Industries.
The two firms have signed a definitive agreement for approximately Rs 1,200 crore as a one-time indefeasible right to use fees for sharing Reliance Communications’ nationwide inter-city fibre optic network infrastructure, Reliance Communications said in a statement.
“This agreement is the first in an intended comprehensive framework of business cooperation between Reliance Jio Infocommand Reliance Communications to provide for optimal utilisation of the existing and future infrastructure of both companies on reciprocal basis, including inter alia, inter-city fibre, towers and related assets,” the statement said.
The agreement provides for joint working agreements to be put in place immediately for upgradation of the optic fibre network to ensure seamless delivery of next generation services.
When Reliance was split into two
When Dhirubhai Ambani died in July 2002, many people prophesied that it would be only a matter of time before his two sons, heirs to the country’s largest business house, would fall out. Indeed, the brothers launched into a bitter and very public battle, which spanned over seven months. Finally, on June 18, the ambani matriarch, Kokilaben D Ambani, announced a settlement between them by sending out a statement to the press saying: "With the blessings of Srinathji, I have amicably resolved the issues between my two sons, Mukesh and Anil, keeping in mind the proud legacy of my husband Dhirubhai Ambani.” The deal chalked out divided the Rs 99,000-crore empire into two with Mukesh taking control of Reliance Industries and IPCL while Anil took over responsibility for Reliance Infocomm, Reliance Energy and Reliance Capital
Ambani stocks soar at BSE
Following the news of the deal, RCom shares closed 11 per cent higher at Rs 63.30 on the Bombay Stock Exchange, while Reliance Industries advanced 2 per cent to end at Rs 793.95. Other listed group companies of Anil Ambani also surged after the news. Reliance Capital gained 4.3 per cent, Reliance Infra rose 3.8 per cent, while Reliance Power shares gained 4 per cent.
Did you know?
Reliance Industries, controlled by India’s richest man Mukesh Ambani, is the only company to have 4G airwaves for all of India’s 22 service areas, but is yet to launch services