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Jio to Buy Reliance Communication Assets, Telecom Sector Consolidates Further

Jio to Buy Reliance Communication Assets, Telecom Sector Consolidates Further

Mukesh Ambani owned Reliance Jio is set to collaborate with brother Anil Ambani’s Reliance Communication. The deal will allow Reliance Jio to acquire wireless assets of Reliance Comm.

Unprecedented Lead for Reliance Jio

Reliance Jio that has seen a surplus growth in telecom since its launch will now grow with faster pace as it is going to acquire major wireless asset of Reliance Communication owned by Anil Ambani. The deal will not only be beneficial for Reliance Jio but will also benefit RCOM.

In the deal that is made, 43,000 towers will be used by Jio and the 4G spectrum of RCOM too will be used by Jio. The deal will carry nearly all wireless assets of RCOM. This also adds fiber optics, cable network, media convergence nodes and many more.

This deal is made through a bid from RCOM where Reliance Jio successfully qualified. This was step taken by RCOM to monetize wireless assets in order to repay debt. It was told that these assets are strategic in nature that will help Jio to expand its wireless, fiber to home and enterprise services.

Since the last one month the market of RCOM picked up. The RCOM share price BSE was Rs 11.80 on Dec 18 which is now Rs 31.35 as of Dec 28, 2017. This news will definitely add more rally to the stock on the last trading day of 2017. This deal is significantly beneficial for RCOM and so for the Reliance Jio.

Jio: Reliance Comm RCOM share price bse december 2017

Win- Win Deal for Ambani Brothers on Dhirubhai’s Birthday

The deal is announced on the birthday of Dirubhai Ambani who happens to be the father of both Mukesh and Anil Ambani. The transaction is likely to be closed in a phased manner between January and March, 2018.

The strategic benefit of this deal will benefit both the brothers as Reliance Jio will enjoy all the wireless infrastructure of RCOM and it will help Jio in unprecedented growth in comparison to other telecom players in India.

On the other hand, RCOM will benefit by this deal in a huge way by filling its debt of Rs 44,000 crores. This after 12 years that the two brothers are uniting again with this deal. The two brothers split in 2005 after a feud where Mukesh Ambani led Reliance Industries that kept the cash cow oil, gas business with him while RCOM took over telecom and power sector.

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