RCOM set to hive off tower subsidiary

15 Jun 2010

India’s second largest mobile network operator, Reliance Communications (RCOM), has announced that its board has approved plans to divest its tower unit, Reliance Infratel. According to the Economic Times, RCOM aims to spin off its infrastructure arm as an independent entity; at present RCOM holds a 95% stake in Infratel. Such plans follow earlier reports that RCOM was mulling the sale of a 26% stake in the tower company, with a view to any cash raised by such a deal helping it to fight the effects of hyper-competition in the Indian wireless sector and the imminent cost of rolling out a third-generation network. It is understood that negotiations with interested parties regarding the stake sale remain ongoing and at an ‘advanced stage’. RCOM has contended that the transformation of Infratel into an independent company would increase the number of contracts it could attract from wireless rivals of its current parent company.

India, Reliance Communications (RCOM)