The Hindu Business Line : RCom buys UK-based WiMax operator

RCom intends to invest $500 million in eWave to build and acquire WiMax networks in the emerging markets of Asia, Europe, Latin America and Africa, Mr Punit Garg, CEO of Reliance Globalcom, the global arm of RCom, said at a news conference today.

RCom will also use this acquisition as a springboard to extend WiMax services to 50 countries by 2012, he said.

Though the companies refused to disclose the financial details of the acquisition citing a non-disclosure agreement, it is learnt that RCom will pay $110 million for the 90 per cent stake.

eWave World is a telecom operator focused on wireless telephony services using the WiMax technology standard, especially in emerging geographies. The company has already won WiMax licences in 18-20 countries.

As an immediate benefit, Reliance will be able to launch WiMax services in China, which is considered to be the world’s largest market for broadband services, said Mr Garg.

eWave has presence in China through a joint venture “We will launch WiMax services in China as soon as we receive spectrum,” Mr Garg said, without specifying a timeframe. In India, RCom offers WiMax services in about 18 cities. RCom will fund the eWave acquisition through internal accruals, the company said.

As part of the deal, eWave will outsource (to India) some of its engineering work, said Mr Jay Metcalfe, Chairman of eWave World, in a videoconference call from London.

The RCom scrip was down by 2.89 per cent to close at Rs 532.8 on the BSE today.

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