Indian mobile operator Reliance Communications (RCom) has decided to postpone the sale of its tower unit Reliance Infratel because the latter may lose two large customers, Dow Jones reported citing a person familiar with the matter.
It is suggested…
Indian mobile operator Reliance Communications (RCom) has decided to postpone the sale of its tower unit Reliance Infratel because the latter may lose two large customers, Dow Jones reported citing a person familiar with the matter.
It is suggested that the two concerned customers that use Infratel’s infrastructure are Etisalat DB and S-Tel.
The two Indian mobile carriers are expected to shut or scale down their operations following the cancellation of their 2G licences by India’s Supreme Court in the wake of the 2G scam.
This, in turn, is expected to hurt Infratel’s valuation.
RCom could not be reached for comment before the press deadline.
In late February, it was reported that private equity firms Blackstone and Carlyle had signed a term sheet to buy a 95% stake in Infratel. The deal could reportedly fetch between Rs150bn (US$3bn) and Rs20bn (US$4bn).
But in the past, the Infratel sale has already collapsed on valuation issues.
About 16 months ago, RCom was very close to a deal with another tower company, GTL. The US$11bn tower merger later failed because of alleged valuation differences.
More recently, in June last year, a deal with independent towerco Viom Networks also collapsed after Reliance Infratel’s asking price of US$5bn was reportedly branded as unrealistic.