RCom in talks with 3 firms for tower sharing

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SummaryIndia’s third largest telephone company by subscribers, Reliance Communications’ telecom tower unit is in advanced stages of discussions with three telecom players for a large infrastructure sharing deal, a company executive said on Thursday on a conference call with analysts.

India’s third largest telephone company by subscribers, Reliance Communications’ telecom tower unit is in advanced stages of discussions with three telecom players for a large infrastructure sharing deal, a company executive said on Thursday on a conference call with analysts.

The infrastructure unit of the debt-laden RCom, Reliance Infratel, has about 50,000 towers. In the market, the monthly rent for each tower varies between R25,000-R35,000.

The Anil Ambani-controlled RCom may tie up with Mukesh Ambani's Reliance Industries (RIL) for a tower-sharing deal for the rollout of its 4G services. RIL has also made a request for proposal to Reliance Communications, according to sources. Talks are on with a Singapore-based firm too, sources added.

A person close to RIL says the company will use RCom's towers in the initial stage of the 4G rollout, but added that no final agreement has been reached till now. “RIL is still evaluating the monthly rent and the cost, as they would go in for the least expensive lease,” the person said.

President and CEO of RCom's wireless business Gurdeep Singh maintains that it is “premature to comment” on the details of a potential deal with RIL, when asked if the company would be leasing it at cheaper rates.

RCom shares closed down 9% at R80.05 on Thursday on the BSE. RCom, which has a debt of R36,329 crore as on December 31, expects two-three more tariff hikes in the next twelve months.

The firmhad hiked tariffs in January and September as most telecom companies look to offset high costs and spectrum fee. On Wednesday, Bharti Airtel, India's top mobile phone carrier, and Idea Cellular increased effective tariffs on special value vouchers by between 8% and 25%. Vodafone India has also said it may be inclined to follow suit.

Due to higher call rates, revenue per minute is also expected to go up by 6-8 paise over the next 12-16 months, Singh said.

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