Indian mobile operator Reliance Communications’ (RCom) plans to sell undersea cable assets to Hong Kong-based backhaul operator Citic Telecom are reportedly in jeopardy.
Exclusive talks between the two companies have stalled, the Economic Times cited…
Indian mobile operator Reliance Communications’ (RCom) plans to sell undersea cable assets to Hong Kong-based backhaul operator Citic Telecom are reportedly in jeopardy.
Exclusive talks between the two companies have stalled, the Economic Times cited four people with knowledge of the matter as saying.
The discussions floundered following the appointment of Citic Telecom’s new CEO, Lin Zhenhui, last month, one source was cited as saying. Zhenhui is not keen to pursue a deal so early on in his career with the state-controlled telco, the source noted.
Last May, it was reported that Citic Telecom was close to buying into undersea cable operator Global Cloud Xchange (GCX), which RCom owns via subsidiary Reliance Globalcom. The two companies were reportedly in exclusive talks to forge a US$1bn 50-50 joint venture.
According to one source cited in the ET report, the exclusivity agreement between RCom and Citic Telecom has now expired. Two sources reportedly said negotiations could be resumed at a later date.
However, GCX CEO Bill Barney was quoted saying that talks with Citic Telecom are still ongoing but declined to comment further because of confidentiality agreements.
In 2013, RCom, controlled by Indian businessman Anil Ambani, abandoned plans to sell Globalcom, first to Bahrain’s Batelco, and then to a consortium of private equity funds led by investment firm Samena Capita.
Unlike a Globalcom transaction, a GCX deal would not include voice telecoms services.
GCX owns an undersea cable system spanning 68,700km, and claims to serve more than 2,100 enterprises, 200 carriers and 2.5 million retail customers across the globe.
RCom, which has been seeking to cut debt, and Citic Telecom were not immediately available for comment.
