Reliance Jio signs tower sharing pact with GTL Infra to speed up 4G rollout

Both GTL Infra and Reliance Jio, however, didn't reveal the size of the deal.

Network services company GTL Infrastructure on Thursday said it had entered into a Master Services Agreement (MSA) for tower infrastructure sharing with Reliance Jio Infocomm as the Mukesh Ambani-led company hopes to accelerate the launch of its pan-India fourth-generation (4G) telecom services in coming months.

Both GTL Infra and Reliance Jio, however, didn’t reveal the size of the deal.

Reliance Jio Infocomm already has many pacts with tower infrastructure companies as it plans to roll out 4G services before the end of the current fiscal.

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Apart from a pact with Ascend Telecom for more than 4,500 towers, the Navi Mumbai-headquatered telco also has agreements with Tower Vision for 8,400 towers, ATC India for 11,000 towers and Viom Networks for 42,000 towers. Additionally, it has an agreement with the Anil Ambani-led Reliance Communications for sharing the latter’s optic fibre infrastructure and over 45,000 towers. The company also has a tower sharing agreement with Bharti Infratel and for sharing optic fibre with Bharti Airtel.

Our mission is to launch a pan India next-generation voice and data service, said Reliance Jio Infocomm’s managing director Sanjay Mashruwala said in a BSE filing on Thursday.

“This agreement with GTL Infra is not only a step in that direction but will also help us accelerate our rollout,” Mashruwala added.

According to a recent Credit Suisse report released in September, Reliance Jio Infocomm is on track to launch its pan-India fourth-generation data and voice services by March 2015.

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Chairman Mukesh Ambani had in June told Reliance Industries shareholders that Reliance Jio will roll out fourth-generation (4G) data and voice services across 5,000 towns and cities and 215,000 villages in 2015.

GTL Infra, together with Chennai Network Infrastructure (CNIL), a subsidiary of GTL Infra’s parent company Global Group Enterprise, currently holds a combined portfolio of over 27, 800 towers.

The launch of 4G networks and the rise in consumption of data is a growth driver for tower companies, said Global Group’s Group CEO Charudatta Naik, in a statement to the BSE. Global Group is an infrastructure services company involved in sectors like telecom and power. It has two companies listed on Indian stock exchanges, GTL and GTL Infrastructure.

While GTL’s standalone net debt stood at Rs 2,104.21 crore at the end of March 31, 2014, according to Bloomberg data, GTL Infra’s standalone net debt stood at Rs 4,922.09 crore during the same period.

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Both companies, however, opted for corporate debt restructuring (CDR), after taking heavy loans to purchase Aircel’s tower assets for about $1 billion in 2011.

At GTL’s AGM on Tuesday, founder Manoj Tirodkar told shareholders the company was looking to exit CDR in two-to- three years, or reduce its debt considerably during the period.

“We will get rid of unrequired assets, unprofitable businesses, and look for joint venture opportunities with our profitable businesses,” he said.

fe Bureau | The Financial Express