India's Reliance Communications, GTL scrap tower deal

Sep 6, 2010, 12:59 GMT

New Delhi - Reliance Communications Ltd, India's second-largest wireless carrier, and GTL Infrastructure Ltd scrapped a proposed 11-billion-dollar deal to create the world's largest independent telecommunications-infrastructure firm, they said Monday.

Under the deal announced in June, 50,000 towers belonging to Reliance Infratel, owned 95 per cent by Reliance Communications, were to be merged with Mumbai-based GTL, which offers infrastructure services to wireless telecommunications operators.

Reliance, headed by billionaire Anil Ambani, gave no reason for the failure of the deal, citing a non-disclosure agreement signed between the companies, but said it was now speaking to other parties for a similar transaction.

'A non-binding agreement in June expired August 31, and neither side is extending the deadline,' GTL said in a regulatory filing with the Bombay Stock Exchange. 'Consequently, the process of merger as originally contemplated would not take place.'

The combined entity would have had 80,000 towers and more than 125,000 tenancies from more than 10 telecommunications players.

Reliance Communications had earlier said that the deal would have brought in significant cash that would have helped reduce the company's debt burden.

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