Mumbai, Sep 28 (IANS) Reliance Communications, India’s second largest telecom firm, Tuesday said it was not only considering up to 26 percent equity investment by a strategic investor, but also floating a public issue for its now independent towers arm.
‘In Reliance Communications, we have the option of inviting minority equity participation of up to 26 percent from financial and strategic investors,’ Chairman Anil Ambani told the company’s annual general meeting here.
‘There is substantial interest in the market for such an offering given that we are now the only telecom operator in the country without a foreign partner,’ he said, adding the idea was to become a debt-free company in three years.
‘A combination of these strategic and financial initiatives would result in substantial cash infusion into your company and bring down our debt levels significantly in the next few quarters.’
The announcement led to a 1.33 percent rise in the Reliance Communications scrip at Rs.171.85.
About Reliance Infratel, the company’s infrastructure arm that has been hived off into a separate arm, Ambani said discussions were on with strategic investors to unlock value and create a truly independent, operator-neutral tower company.
‘We also have the possibility, if considered appropriate, of combining such a transaction with a possible initial public offering. For this we have necessary approval already from the Securities and Exchange Board of India,’ he added.
He said nearly Rs.35,000 crore in capital expenditure were incurred in the past three years, and the investment this year was projected in the range of Rs.3,000 crore or less than a fourth of the earlier average.
‘This trend looks set to continue over the next few years.’
On the larger vision of the company, Ambani said Reliance Communications was at the forefront of the telecom revolution of the past decade, making a phone call more affordable than sending a post card.
Ambani said five years ago, Reliance Communications had less than 10 million customers. But today, it had expended to over 115 million, making it India’s second largest and among the world’s top four single-country operator.
‘Reliance Communications will now lead the next wave of change — India’s second telecom revolution,’ he said, adding third generation (3G) telephony and high-speed data access were high on priority.
‘My vision is to make India a ‘wire-free’ country where every Indian has access to high-speed data at the click of a mouse, the press of a key.’
