RCom Says to Focus Strategy on 4G Mobile Broadband Service

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RCom Says to Focus Strategy on 4G Mobile Broadband Service

Highlights

  • RCom said it is shutting its 2G mobile, wireless services in India
  • It added that the 4G LTE connectivity will be in its focus
  • Reliance is also said to be closing its DTH service

Debt-laden Indian telecoms network operator Reliance Communications Ltd (RCom) said on Wednesday it will concentrate on offering a 4G mobile broadband service in a bid to turn the heavily indebted business around.

As part of the plan RCom said its 4G services will run through an existing deal to share radio spectrum with Reliance Jio, the 4G network owned by Reliance Industries which sparked a price war when it opened for business last year.

Reliance Industries is controlled by Mukesh Ambani, the older brother of RCom's main owner Anil Ambani.

Earlier this month, RCom said it would evaluate an alternative plan for the mobile business after a deal fell through to merge the unit with rival Aircel.

The company, which has $6.7 billion (roughly Rs. 43,386 crores) of debt, won a temporary reprieve from its lenders on its debt-servicing obligations in June. RCom has agreed to give the banks stakes in the company by swapping part of the debt for equity.

It was initially banking on the wireless merger deal and a separate deal to sell a stake in its radio masts infrastructure business to cut its debt load by 60 percent. After the wireless deal fell apart RCom said it would also amend the masts deal with Canada's Brookfield Infrastructure.

On Wednesday, RCom said it will be "optimising its 2G and 3G footprint, and related infrastructure and human resources" with effect from November 30, without elaborating further.

A source close to the matter told Reuters this means RCom is set to shutdown parts of its wireless operations, as reported by local media earlier in the day.

© Thomson Reuters 2017

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