Monday, July 27, 2009

Reliance Globalcom Posts 15% Growth, Signs Infrastructure Sharing Deal with Etisalat

India's Reliance Globalcom (RCOM) posted revenue of Rs. 6,145 crore (US$ 1,283 million) for the quarter ended 3-June-2009, up 15.5% from Rs. 5,322 crore (US$ 1,240 million) in the same quarter a year earlier. There was a net profit of Rs. 1,637 crore (US$ 342 million), higher by 8.3% compared to the net profit of Rs. 1,512 crore (US$ 352 million) in the corresponding quarter last year.

In addition, Reliance Infratel (RITL), a subsidiary of RCOM, signed a long term agreement with Etisalat DB, a new wireless mobile services provider for sharing its telecom infrastructure. The company expects the deal to enhance RCOM's revenue by Rs. 10,000 crores (US$ 2.2 bn) which includes revenue from sharing of end-to-end tower and transmission infrastructure. The geographical scope of the deal covers 15 telecom circles which constitutes over 85% of India's population and over 90% of subscribers and revenue market in India.

The deal provides Etisalat DB the advantage of faster roll-out with the coverage comparable to the incumbents. The deal also enables Etisalat DB to adopt an asset light model by converting most of the capex into opex. RCOM can potentially sign agreement for sharing other infrastructure elements like Bandwidth/Fibre, domestic and International long distance carriage services, collocation of BSC & other core network equipments which would be a further upside to this agreement.

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