RIL’s big bang entry into telecom

Mukesh Ambani led Reliance Industries on Friday announced that it will buy Infotel Broadband Services for Rs 4,800 crore, thus, marking the re-entry of India’s most valued firm into the booming telecom space.

The decision came within hours after Infotel Broadband Services emerged as the sole winner of broadband spectrum in all 22 zones in India in an auction that ended on Friday.

The acquisition of 95 per cent stake, through fresh equity infusion, values Mahendra Nahata group's Infotel at over Rs 5,000 crore, follows a truce arrived at between Mukesh and his younger brother Anil on May 23 wherein the warring brothers scrapped a non-compete agreement to allow each other's business flexibility.

Reliance Industries also said they plan to forge strategic partnerships with technology players, device manufacturers and application developers to claim dominance in the 4G sector.

Commenting on the deal Mukesh Ambani said: "We see this as the next wave of value creation opportunity in the wireless broadband space. We believe this will pole-vault India's economy into the digital world & create world class consumer experiences."

Anil's group firm Reliance Communication exited the 16-day long wireless spectrum auction a week ago.

Soon after announcement, the markets as expected reacted positively, RIL shares ended higher by 3 per cent on the Sensex.

This announcement perhaps is coming exactly a week before RIL's AGM scheduled to be held on June 18.

And as always the markets and investors expectations are sky high with everyone expecting Mukesh Ambani to make some big bang announcements.

The one sector that the markets expect RIL to enter is the power sector with their plans of seting up some coal based power plants in Maharashtra and Gujarat. Perhaps that’s the next big thing from RIL's stable.

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