The Hindu Business Line : RCom to transfer optical fibre biz to Reliance Infratel

Mumbai, Feb. 2 The board of Reliance Communications has decided to transfer the optical fibre business of the company to Reliance Infratel, a subsidiary of the company.

The transfer will be through a court-approved demerger of the unit at a fair value, the company said in a statement to the NSE.

No additional equity shares are to be issued and no change is proposed to the capital structure of Reliance Communications, said the statement.

The consolidation of the optical fibre division into this company reflects the global trend of segregating the telecommunication infrastructure business, leading to cost synergies and efficiencies, said RCom. The company has several thousand kilometres of optical fibre lines laid across the country.

Reliance Infratel itself was demerged from Reliance Communications two years ago, so that the tower and telecom infrastructure business could be leased out to other telecom operators, to provide for higher revenues. Reliance Infratel currently owns all the towers used by RCom’s CDMA and GSM operations; the communication sites and the towers are also intended to be shared with other wireless operators in the country.

A draft red herring prospectus had been filed with SEBI for an initial public offering of shares in Reliance Infratel early last year, but the offer plan had to be shelved in view of the stock market conditions that have prevailed since.

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