<div>It has been in the air for quite some time. A day after <a href="http://businessworld.in/en/storypage/-/bw/ril-plans-rs-1-5-lakh-cr-investment-over-3-yrs/926112.37489/page/0"><strong>Mukesh Ambani</strong></a> stated at Reliance Industries annual general meeting that the group would invest $ 3 billion in telecom operations, Reliance Jio Infocomm (RJIL), and Reliance Communications (RComm) announced the signing of an agreement to share RComm's telecom towers infrastructure. Under the deal, RComm will get Rs 12,000 crore over the lifetime of the agreement. <br /><br />Reliance Jio Infocomm will use 45,000 telecom towers of RComm to roll-out its broadband wireless access services across the country. "The agreement provides for joint working arrangements to configure the scope of additional towers to be built at new locations to ensure deep penetration and seamless delivery of next generation services," said a press statement.<br /><br />This is the second deal that RJI has done with RComm over the past couple of months. In April, RJI had done a Rs 1,200 crore deal with RComm for an inter-city optic fibre sharing agreement. In between, RJI had also announced that it will utilize Bharti Airtel's i2i submarine cable that connects India and Singapore.<br /><br />So what does all this mean? The big gainer is no doubt RComm which is bogged down with a net debt of Rs 38,864 crore at the end of FY 2013. It will be a boost to RComm that had a net profit of Rs 671.6 crore on revenues of Rs 21,778 crore in the last fiscal. In 2011-12, RComm had notched profits of Rs 928 crore on revenues of Rs 20,382 crore. It remains to be seen how quickly RComm will be able to retire some proportion of its net debt.<br /><br />As far as RJI is concerned, it is quite clear now that it is following an asset light strategy. Instead of setting up its own infrastructure, it will use existing infrastructure. It remains to be seen if RJI will join hands with other tower companies too to increase its reach across the country.</div>
