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Etisalat-RCOM sign Rs 10,000 crore tower sharing deal
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NEW DELHI: Etisalat DB, which has acquired a 45% stake in new telecoms player Swan Telecom has signed a 10-year tower sharing deal with the hived off infrastructure arm of Reliance Communications. Both companies said that the deal could be worth as much as Rs 10,000 crore over this 10-year period.

This marks the second major tower sharing deal in the country in recent months. Earlier this year, Norway’s Telenor, which is in the process of picking up a 67.25% stake in Unitech Wireless, had signed a infrastructure sharing deal with the Tata-Quippo combined tower co.

Etisalat-Swan has mobile licenses to offer mobile services in 15 of the 22 telecom circles in the country. ET had first reported in January 2009 that Etisalat-Swan was in advanced talks for a 10-year infrastructure sharing deal with Reliance Telecom Infrastructure Ltd (RTIL) the hived off tower arm of RCOM. RTIL has about 50,000 towers spread across the 22 telecom circles of the country. RTIL is amongst the large infrastructure firms in the country after Indus Towers, the largest independent tower co in the world with over 103,000 units. Indus Towers is a three-way JV between Bharti Airtel, Idea Cellular & Vodafone Essar.

While Etisalat owns 45% in the telco, the remaining 55% is held by several entities, including Swan's primary promoter, the Dynamix Balwas Group, a Mumbai-based real estate and hospitality business group.

“This agreement presents large cost optimization benefits with an asset light model, improvement in capital productivity and enhances RCOM group revenues by Rs 10,000 crores. The agreement with Reliance Communications Group is the first and the largest Telecom Infrastructure sharing including Towers and Transmission agreement of its kind in the Indian Telecom landscape and strongly complements Etisalat DB Telecom’s plans for India,” both Etisalat & RCOM said in said in a joint statement on Wednesday.


Commenting on the infrastructure sharing deal with Reliance Communications, the Etisalat chairman Mohammad Hassan Omran said, “As a new entrant in this dynamic market, this alliance provides us with key, strategic advantages that will ensure a robust, speed to market and cost-effective roll-out of services. Strategic alliances are an integral part of our plans for growth and Etisalat Group will always be receptive to such alliances which help to enhance the customer experience.”

The chairman of the Reliance ADA Group Anil Dhirubhai Ambani, said this ‘landmark agreement that will re-define the future of Indian telecom sector’. “This win-win agreement demonstrates Reliance Communications capabilities to enable the operators to go-to-market with a bouquet of telecom infrastructure services. This will ensure a faster rollout, optimum costs and a time to market advantage,” he added.

Earlier, RCOM held 9.99% stake in Swan Tele and had also given capital to the company in the form of debt. RCOM then exited Swan Telecom before the company was given mobile licenses by the Department of Telecom.

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