India's Reliance Comm, GTL in 11-billion-dollar telecom tower deal

Jun 27, 2010, 11:13 GMT

New Delhi - Reliance Communications, India's second-largest wireless carrier, and GTL Infrastructure Ltd on Sunday finalized an 11-billion-dollar deal to create the world's largest independent telecom infrastructure firm.

'The board of GTL Infrastructure today in-principle approved a 500-billion-rupee (11-billion-dollar) transaction to create the world's largest independent telecom infrastructure company, neither owned nor controlled by any telecom operator,' a GTL statement said.

Under the deal, 50,000 towers of Reliance Infratel, in which Reliance Communications holds a 95 per cent stake, will be merged with Mumbai-based GTL, which offers infrastructure services to wireless telecom operators.

'The proposed transaction is subject to receipt of all necessary approvals, customary due diligence, definitive documentation, etc. It is anticipated that, barring unforeseen circumstances, the transaction will achieve final closing over the next 6 months,' the statement said.

The combined entity will have 80,000 towers and over 125,000 tenancies from over 10 telecom players. GTL in January agreed to buy 17,500 transmission sites from Aircel Ltd.

The deal would bring in significant cash into Reliance Communications which would help reduce the company's debt burden.

An optic fibre network of over 200,000 kilometres and related assets owned by Reliance Infratel will remain under Reliance Communications.

India is the world's fastest growing mobile telephone market with nearly 600 million subscribers currently, up from 10 million in 2002.

It is projected that India will have nearly 1.2 billion mobile subscribers by 2013. The next phase of growth is expected to come from the 3G service launches lined up towards the end of the year.