The installation of optical fibre from a central point to individual area or buildings is known as “fibre to home”. Despite of increasing use of data through mobile networks, fibre to home is attracting people to consume high speed data.
Reliance Jio to Sign a Deal of Buying RCom’s Wireless Assets
Reliance Jio led by Mukesh Ambani has announced buying of wireless infrastructure assets such as optic fibre cables network, media convergence nodes, and towers of Reliance Communications (RCom) and its associates in all cash deal. The RCom is run and owned by Anil Ambani, a younger sibling.
It is strange that in an acquisition transaction associated to a listed company buying other, no acquisition cost has been publically revealed to stakeholder. However, the Economic Times stated that the deal is pegged at RS 240 Bn. According to a press statement from RCom states that after this purchase Jio is likely to gain more than 178,000 Km of optic fibre, 122.4 MHz of 4G spectrum and over 43,000 cellphone towers.
A statement from Reliance Jio stated that these newly attained assets are tactical in nature and anticipated to contribute considerably in the large-scale rollout of fibre-to-home and wireless services by the company.
The information released by TRAI in the Oct 2017, Reliance Jio has over 120 Mn active subscribers and the same for RCom was above 46 Mn. However, a directive from TRAI on 31st Oct stated that RCom should deliver only 4G data service to its consumers and as the result will terminate to deliver voice service to subscribers, with effect from 1 Dec, 2017. The controller had informed RCom not to discard any porting out application of their subscribers and urged all the telecom operators to admit all applications of subscribers of RCom till 31 Dec, 2017. This further states, Reliance Jio is not going to add entire 46 Mn subscriber base to their network.
Highlights about the Deal
An Economic Times Report postulates that this is the first step taken by Ambani Brothers towards merging of their father’s business. The timing for this deal was set to happen on Dhirubhai Ambani’s birthday.
Prashant Singhal in a statement stated that if the deal in RS 250 Bn ballpark it will aid RCom minimize a lot of its debs and won’t need any write-offs from lenders.
Morgan Stanley, Major at Global Financial Services stated that this deal is likely to increase Jio’s parent company RIL’s net debt approximately 12% in foreseeable future.
Broadband Subscriber Based to Expand by 44% States Study
In India, increasing demand for data will boost nearly 44% expansion in the number of wireline broadband subscribers in coming 4 years. It is likely to initiate competition among standalone broadband service, cable TV providers, and telecom operators.
Demand for high speed data in places such as educational institutes, small enterprises, offices and homes is likely to remain high, though customers are overwhelmed of number of data offers on their devices. Wireline broadband compresses broadband internet connectivity through fixed cable lines or fibre to home networks.
A recent report published by Future Market Insights forecasts staggering expansion of the market over the assessment period (2017-2027). The market is anticipated to reach over US$ 36 Bn in terms of value by the end of 2027. The North America is projected to remain the largest region for this market.