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RCom signs Rs 10,000-cr deal with Etisalat to share facilities

23 Jul 2009

Telecom operator Etisalat DB, formerly known as Swan Telecom, has decided to outsource its telecom infrastructure requirements to the Anil Ambani Group company Reliance Communications as part of a Rs 10,000-crore deal spread over the next 10 years.

 

According to the agreement announced on Wednesday, Etisalat DB would outsource its telecom infrastructure requirements for the 15 telecom circles for which it has received licences to set up mobile services. While Reliance Communications will provide transmission infrastructure, Reliance Infratel Ltd, another ADAG group company, will provide the tower facility.

 

Mumbai-based Etisalat DB, in which the Arab region’s second-largest telecom operator owns a 45 per cent stake, has licences to provide mobile services in 15 of India’s 22 telecom zones, but is yet to start services. The agreement is on a pay-as-you-avail basis. Hence, Etisalat does not have to make any upfront payments to RCom.

 

Following this deal, Reliance Infratel is expected to see increased tenancy ratio (expressed as the fraction of total number of operators sharing the towers/total number of sites present). RCom currently is in discussions for similar engagements with other telcos in the country. These include the new entrants as well as existing firms which are on an expansion drive.

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