Reliance Infotel in talks with AT&T to offload 26% stake

Mukesh Dhirubhai Ambani owned Reliance Infotel is in talks with AT&T for a possible partnership for it’s yet to be launched broadband wireless access business. The Mumbai headquartered company is planning to offload 26% stake for Rs 19,000 crore and is in advanced talks with the US telecom behemoth.

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‘Both the companies are in active discussion for a partnership and the US based carrier is keen on taking 26% stake in RIL-Infotel in the initial phase,’ said a source familiar with the development. They might increase the share holding structure in future.’
As per the talks so far, AT&T, the largest telecom service provider in the US, would pay close to Rs 19,000 crore to buy 26% of RIL Infotel and would take two seats in the board of management of the new entity.

‘It would help RIL in two ways- they would get the much needed cash required to run the business for the initial two years; and the second is AT&T has huge experience in running BWA services in the US,’ the source explained.

He also said that AT&T has managed the 4G transistion very well in the US and certainly can help RIL coming out with a truly triple play solution for the Indian market.

Industry analysts also corroborated the valuation of RIL’s 26% at Rs 15,000 to Rs 20,000 crore. To initiate BWA service for a green field operator a minimum of Rs 15,000 crore investment is required, said a New Delhi based telecom analyst on the condition of anonymity. And certainly RIL Infotel would demand a premium on this, if they sell 26% stake, he added.

RIL Infotel is the only company in India to bag BWA license for the entire 22 circles during the spectrum auction held during 2010. So far, bharti airtel is the only company to launch its BWA services on LTE in two circles- Karnataka and Kolkata.

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