Anil Dhirubhai Ambani Group (ADAG) company Reliance Communications (RComm) on Thursday said it will acquire Digicable Networks, a leading cable TV distribution company in a cashless, all-stock deal. Without disclosing the acquisition size, RComm said the new integrated entity, Reliance DigiCom, will comprise its direct-to-home, internet protocol television and retail broadbrand operations.
RComm claimed the new entity will be country?s largest with 11 million subscribers, offering the full suite of triple play services: digital TV, ultra high-speed broadband and voice. India had 21.3 million digital cable subscribers by the end of March 2010. Sources said the combined entity, Reliance Digicom, will command a valuation of $1 billion (Rs 4,650 crore). This comes a few days after RComm said it would merge its tower infrastructure firm Reliance Infratel with GTL Infrastructure, a deal worth Rs 50,000 crore.
Of late, the ADAG group has been actively expanding its businesses and looking at ways to cut its Rs 33,000-crore debt in RComm. Recently, the Rcomm board approved a proposal to sell about 26% in the company.
Anil Ambani, chairman, RComm said: ?With this game-changing move, we hope to lead the next revolution in digital home entertainment in India, by offering a world-class TV experience and ultra-high speed broadband capability to a billion people.?
Jagjit Kohli, CEO, Digicable said: ?We will come out with the details on the valuation and clarify each entity?s holdings in a day or so.? Three years back, Ashmore Investment Management had picked up 49% in Digicable and was looking at restructuring its investments in the cable business in favour of DTH. The deal is expected to give ADAG access to Digicable?s cable business in several cities and a share in the Rs 2,500-crore annual cable subscription revenues.
The deal also helps RComm enter the headend-in-the-sky (HITS) business, a satellite-based system of distributing cable channels.