MTN - RCOM Deal off

The much-touted deal between Anil Ambani group company Reliance Communications (RCom) and South African telecom giant MTN was called off on Friday.

"The two sides were unable to conclude the transaction due to certain regulatory issues," RCom spokesperson said in statement on Friday night.





The deal, which was clouded by the bitter dispute between the Ambani siblings, was called off a day after Reliance Industries nominated an arbitrator to resolve the dispute with RCom.

RCom and MTN decided to end the exclusivity agreement three days before its expiry.

No CDMA, GSM Licence

Department of Telecom is understood to be against allowing CDMA operators to offer GSM-based mobile services on the same licence since it will enable them to hold a large chunk of spectrum leading to market dominance.
But the department would wait for TRAI recommendations before taking any decision. Sources said that although DoT has its own view over the matter, the regulator's view would be studied closely before making any decisions on the same.
In DoT's view, Unified Access Service Licence (UASL) holder can offer wireless and wireline services. But on wireless, the operator has to chase only one proven technology of his choice.
Once the technology is chosen, the company has to stick to that because a particular band of spectrum has been given to it, official sources said.
The other reason, they said, is if one licencee wants to keep two technologies, it would hold a bigger chunk of spectrum which could give it market dominance and leave less spectrum for others.
UASL players like Reliance Communication who have applied for GSM spectrum could offer both GSM and CDMA services on the same licences because of technology neutrality. RCom currently offers GSM services in some circles through group firm Reliance Telecom.
Operators interpret the lack of policy clarity in the UASL norms as technology neutrality. That's why TRAI was asked to give its recommendations on the issue, the sources said.
If DoT decides to go against CDMA operators offering GSM services under the UASL, it would be a big jolt to the Anil Ambani-promoted company, which is seeking GSM spectrum for a pan-Indian presence. Smaller players like Shyam Telecom and HFCL have also applied for GSM spectrum.

RCom begins FLAG Tele IPO process

Reliance Communications has shortlisted four merchant banks for the initial public offer of its overseas subsidiary FLAG Telecom, which operates a global fibre optic cable network.

RCom will select from among Goldman Sachs, Morgan Stanley, Deutsche Bank and UBS to lead manage the IPO, said sources.

RCom will offload around 10-15 per cent stake in FLAG, which will list again on London Stock Exchange.

Before it was fully acquired by RCom (then Reliance Infocomm) in 2004, FLAG was listed on both NASDAQ and LSE.

The IPO proceeds will part-fund a $1.5 billion expansion plan for FLAG that involves the addition of 50,000 kms of `Next Generation Network' over the next three years.

After RCom acquired FLAG, it augmented it with a new network called FALCON connecting 11 countries in West Asia.

RCom is also planning an additional landing station for FALCON in Thiruvananthapuram in Kerala that will connect the Maldives, said sources. This will be in addition to FALCON's landing station in Mumbai and FLAG's landing station, also in Mumbai.

Reliance had acquired FLAG — which had filed for bankruptcy — for $207 million in early 2004.