Eight years after parting ways, Mukesh Ambani and Anil Ambani on Tuesday started a business collaboration that would allow Reliance Jio Infocomm, controlled by Mukesh, to use the nationwide optic fibre network of Anil’s Reliance Communications Ltd. for a one-time charge of Rs. 1,200 crore.
Access to Anil’s optic fibre network would help Mukesh execute his plans to provide broadband 4G services. Mukesh’s Reliance Jio, however, hasn’t yet got the nod for providing voice services.
Recently, the government announced that broadband companies such as Reliance Jio could offer voice services after paying a one time license fee of Rs. 1,650 crore.
The deal will infuse the much-needed cash into RCom that reportedly has a debt of Rs. 33,000 crore. Mukesh’s RIL, however, is sitting on a cash pile of around Rs. 70,000 crore.
The optic fibre contract may well be the start of a deeper business relationship between the brothers — one active in big ticket infrastructure but with significant debts and the other with plenty of cash to invest in new projects.
The next in line for Mukesh would be access to Anil’s extensive tower network, say observers.
The deal is also a major step in Mukesh’s calibrated return to big time telecom, which, in 2005, had gone to Anil along with power, infrastructure and finance when the brothers divided up the Reliance business empire.