RCom to continue global acquisitions: Anil Ambani

Written by Agencies | Mumbai, July 31: | Updated: Aug 1 2008, 02:21am hrs
Undeterred by the failure of talks with South African telecom major MTN for a possible merger, Anil Ambani, Chairman of Reliance Communications, on Thursday said the company would look at overseas acquisitions.

"We will continue to examine opportunities that have sustainable value creation for us, both on an organic and inorganic basis within the country and outside," Ambani told analysts during a conference call to discuss Q1 results.

He acknowledged that MTN was a big opportunity that the company had pursued.

"The MTN opportunity was one large opportunity which we did examine. I think, we have the management bandwidth, capacity and the capability for multi-tasking in the 21st century," the Chairman said.

Earlier in June RCom and MTN had called-off their exclusivity talks citing "certain legal and regulatory issues".

The proposed merger would have created an over 60 billion dollar telecom entity.

On May 26, RCom had entered into exclusive talks to combine with MTN. Then on July 9, both the companies decided to extend the period of exclusivity for their potential merger negotiations till July 21. But the deal was finally called off on July 18.

The regulatory hurdles rose after elder brother Mukesh Ambani-controlled Reliance Industries (RIL) claimed first right of refusal to buy a controlling stake in RCom, based on an agreement dated January 2006.

The failure of the deal, could not be substituted by the two deals that RCom struck during the April-June period.

During the first quarter, Rcom acquired two UK firms-- Vanco and eWave World.

Reliance Globalcom, a subsidiary of RCom, acquired London-based managed network services provider, Vanco Group, for about 77 million dollar (Rs 324 crore).

The acquisition of Vanco would add 325 million dollars to the annual revenues of Reliance Globalcom through secure long -term contracts with large enterprise customers.

Vanco is considered to be among the world's top five managed global network players with over 220 multinational customers.

The company also acquired eWave World, a UK-based WiMax operator for an undisclosed sum.

RCom, India's No. 2 mobile operator, today posted a 23.8 percent rise in quarterly profit on higher subscriber additions in the world's fastest-growing wireless market Rs 1,512 crore.

Revenue rose to Rs 5,322 crore. The company added 5 million mobile users during the quarter to have nearly 51 million users at end-June.

Last week, Reliance's rival Bharti Airtel reported a forecast-beating 34 per cent rise in June quarter profit.

RCom, although missing out an opportunity to become global top-10 telecoms by merging with MTN, achieved many milestones during the quarter, which contributed towards strong financial results.

Some of them include the introduction of an unprecedented customer benefit "Unlimited Free STD calls" plan, JV with Alcatel-Lucent for Managed Network Services offering, acquisition of VANCO Group and alliance with Stealth Communications.