Wednesday, April 24, 2013

Reliance Jio, Bharti ink pact for cable network

Airtel undersea cables to carry Reliance Jio data

Mukesh Ambani's Reliance Jio Infocomm on Monday surprised the market by sealing an international data connectivity deal with the Sunil Mittal-led Bharti Airtel, sending out a signal that the billionaire's return to telecom would be more collaborative and less disruptive.

Since Ambani's 2002-03 telecom foray was marked by a fierce rivalry with Mittal's Bharti, the pact — in which Reliance will use Bharti's undersea i2i submarine cable networks to provide data connectivity across Asia Pacific — is seen as significant.

Coming close on the heels of Reliance Jio signing a similar pact for inter-city data traffic with Anil Ambani's Reliance Communications, the latest move signals that collaboration will not be restricted to the family. The market will now tune into the tower-sharing pacts Reliance Jio is expected to sign next — whether it would be only with RCom or extend to others as well. Reliance Jio officials have maintained that the company's model would be "asset-light", based on a range of partnerships where buying equity is ruled out.

Such concerns led the RCom scrip fall as much 5.46% after the announcement, to finally close down 3.28% at R94.50 on BSE. Bharti closed down 0.43% at R299.45 while RIL closed up 1.74% at R803.50.

"Reliance Jio Infocomm will use the dedicated capacity on Bharti's i2i submarine cable that connects India and Singapore to extend its network to customers in the Asia-Pacific region," the companies said in a joint statement, without revealing any commercial terms.

The i2i cable connects India

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