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RCom Could Exit India Following Asset Sale

RCom Could Exit Indian Following Asset Sale

Reliance Communications (RCom) could be set to exit the Indian market after 15 years, with reports indicating that it will sell off its remaining assets.

The operator is currently selling its consumer wireless operations to Reliance Jio Infocomm in order to pay down its INR450 million ($6.9 billion) debt. Once it had shut down its mobile operations, the group was planning to offer telecoms services for enterprise customers, but it now appears to be looking to sell of these assets as well.

RCom’s wholesale assets would include its data centre facilities, submarine cable and fixed-line network, which collectively are valued at around $1.2 billion. Five companies have reportedly expressed interest in acquiring all of these assets, while a further four are keen to obtain a subset of them.

While RCom’s investment board has approved the sale of its consumer asserts, the Indian Supreme Court has not given clearance to the deal. The court will hear the case again on 5th April, which is a setback for RCom as it had hoped to close the deal by the end of March. If it goes ahead, the sale is expected to reduce the operator’s debt by INR250 million.

This is not the only issue facing RCom, as Swedish vendor Ericsson has begun legal proceedings against the operator, claiming it is owed $156 million in unpaid service fees.

RCom first launched operations in India in 2002 via the conglomerate Reliance Industries, but the operator split from the larger business in 2005 over an alleged disagreement between RCom chief Anil Ambani and his brother Mukesh. RCom has struggled since Reliance Jio’s market entry in September 2016 prompted a fierce price war. It attempted to strengthen its presence by merging with Aircel but the deal collapsed.

If the asset sale to Jio goes ahead, it will see RCom’s mobile operations brought back under the wing of Reliance Industries, headed by Mukesh Ambani.

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