Reliance Communications (RCOM) is planning to reduce its expansion cost while hiving off some assets in a bid to reduce its debt by about 37 per cent from Rs 402.2 billion in the quarter ended June 2014 to Rs 255 billion by August 2015. Along with this, the company plans to invest into electronics and use mobile towers and optical fibre of Reliance Jio Infocomm Limited (RJIL) for future expansion.
The debt reduction will be undertaken through numerous measures. Presently, the company is planning to finalise a deal pertaining to stake sale in its international submarine optical fibre company Global Cloud Xchange, formerly Reliance Globalcom by December 2014. RCOM is also looking into selling its real estate assets in Mumbai and Delhi which are valued at about Rs 50 billion. Further, delivery of RCOM?s mobile tower equipment to RJIL will result in revenues of Rs 120 billion for RCOM, over time. It will securitise this amount with banks to raise about Rs 60 billion.
RCOM is also planning to move mobile tower equipment from areas where it has less than 7 per cent market share to other areas where it needs to build capacity. It will enter in to intra-circle roaming agreement with other operators present in areas from where RCOM plans to move its mobile tower equipment.
Seven of RCOM?s licences are expiring in 2015 and would require renewal by buying spectrum afresh through auctions. The company is of the view that this will not have a significant impact on debt as the seven permits coming up for renewal lie in B and C categories circles where spectrum price is expected to be lower.
