Reliance Industries Limited (RIL), the parent of disruptive 4G start-up Reliance Jio Infocomm (Jio), has announced that it has signed agreements to make strategic investments in multiple system operators (MSOs) Hathway Cable and Datacom and Den Networks (DEN), taking majority interests in both firms as it looks to accelerate an entry to the home broadband and TV markets. RIL will invest INR20.45 billion (USD278.5 million) in DEN through a preferential share issue, as well as a secondary purchase of INR2.45 billion from the company’s existing promoters, granting RIL a 66% stake in the firm. Similarly, RIL has agreed to take a 51.3% stake in Hathway via a preferential share issue with an investment of INR29.4 billion. The acquisitions also prompted RIL to make open offers for GTPL Hathway – a firm jointly controlled by Hathway with a 37.3% stake – and Hathway subsidiary Hathway Bhawani Cabletel and Datacomm. The agreements are subject to regulatory approvals.
Through the investment, RIL hopes to collaborate more closely with India’s local cable operators (LCOs), arguing that RIL and Jio will be strengthening some 27,000 LCOs aligned with DEN and Hathway through: access to ‘superior back-end infrastructure; tie-ups with content producers; access to the latest business platforms to improve efficiencies and customer experience; and investment in digital infrastructure for connecting customers. RIL adds that, for their part, the LCOs will continue to ‘provide localised, intimate, people-friendly and ultra-fast customers services’. RIL went on to say that Jio would work with Hathway, DEN and the LCOs to provide a ‘quick and affordable’ upgrade to JioGigaFiber (Jio’s upcoming fibre-to-the-home [FTTH] service) and Jio Smart Home Solutions for 24 million cable-connected homes across 750 cities. Jio is looking to roll out FTTH to a total of 50 million homes across 1,100 cities nationwide but had reportedly encountered difficulty in extending last-mile connectivity due to resistance from LCOs.
According to the most recent data from the Telecom Regulatory Authority of India (TRAI), Hathway counted a total of 754,534 broadband subscribers at end-June 2018, whilst its affiliate GTPL had 250,578 and DEN 106,054.