Anil Ambani, Chairman of Reliance Group formulated a strategic plan to help cut down the debt of RCOM by a drastic margin. The leader executed the ideation by selling stakes in the tower unit to US based company named Brookfield as a part of series of deals that will witness the emergence of Aircel-RCOM’s merged entity. The unnamed merged company is also said to by India’s fourth biggest telecom company."We set an aggressive goal for RCom, to reduce debt from Rs 42,000 crore to zero. With the proposed Aircel transaction and the Brookfield towers deal, we will already be at around Rs 15,000 crore debt, down by over 70%,"Anil Ambani said in a conversation. "Had we sold 100% of the towers business, our debt would have been near zero —our target." The outstanding interest liability that remains will be much more easily manageable.
Few years ago, RCOM was falling short of expectations and in the need of the hour Anil Ambani adopted his father’s idea of finding an opportunity in adversity leading to a two-prolonged strategy. One option was that of consolidation and another to sign an agreement with Mukesh Ambani’s Reliance Jio on spectrum sharing.
"We at RCom recognised the opportunity to embark on a strategic partnership with a major player like Jio," Ambani said. "We have now implemented a comprehensive agreement with Jio to trade and share our gold standard 850 MHz spectrum, and also share infrastructure of towers and fibre."
Anil Ambani believes that the agreement with Jio will lead to savings while gaining a technological edge.
He also said, "In a capital-intensive industry like telecom, this has converted our business model into an asset-light model for future growth, and saved the company billions of dollars, and given us access to a full next-generation 4G network on a pan-India basis."
Reference Link: http://telecom.economictimes.indiatimes.com/news/deal-with-reliance-jio-will-help-rcom-gain-technological-edge-anil-ambani/54929672