The Hindu Business Line : Reliance Comm plans $2.5-b expansion

Big plans
The company is looking to launch new services like DTH and IPTV by third quarter of next fiscal.
Reliance's tower business is being de-merged into a wholly owned subsidiary.

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New Delhi Feb. 2 Telecom major Reliance Communication Ltd has said that it will invest close to $2.5 billion in 2007-08 in expanding its telecom network to more number of towns and cities across the country. The company is also looking to launch new services, including Direct To Home (DTH) and Internet Protocol Television (IPTV) by third quarter of next fiscal.

Mr Anil Ambani, Chairman and Managing Director of Reliance Communication, announced this while talking to analysts post the Q3 results, which was announced on Wednesday.

On Reliance's interest in bidding for Hutchison-Essar, Mr Ambani said the Group would take a conservative stand in bidding for India's fourth largest mobile player. "We are in the process of market consolidation and we see Hutch-Essar as a great synergy with RCom. We will take a conservative stand, keeping in mind sustainable value creation and profit creation. We are watching the development and this opportunity would be decided over next few weeks," said Mr Ambani. Reliance is competing with Vodafone, Hindujas, Maxis, Orascom and Essar to acquire Hutchison Essar.

Tower biz

Mr Ambani also spoke about the company's tower business, which is being de-merged into a wholly owned subsidiary.

The company has struck a deal with Hutch, Airtel, Idea Cellular and Aircel for sharing infrastructure across the country and with State-owned MTNL in Delhi and Mumbai.

On the proposed investments in its cellular network, Mr Ambani said that the outlay for next fiscal would be much higher compared to this fiscal, which would end up at $1.75 billion by March 31, 2007.

Reliance Communications had posted net profit of Rs 924 crore for the third quarter ended December 31 2006, up by 198 per cent, as against Rs 310 crore posted during the corresponding quarter the previous year

Late last month similar announcements were made by Bharti Airtel, which is also investing close to $2.5 billion in network expansion apart from venturing into new areas such as DTH. Bharti had also announced hiving off its cellular infrastructure into another company.

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