Jio pays RCom Rs 5000 cr for the intracity fibre deal

Mukesh_AmbaniReliance Jio will pay Rs 5000 crore to Reliance Communications for the intra city resource sharing pact they signed yesterday, a source said. “The deal value is of Rs 5,000 crore and it spans over next 15 years,” said the executive who is directly involved in the finalisation of the deal.

The deal envisages Mukesh Ambani’s firm Reliance Jio to use the fibre optic infrastructure of RCom within the city. What it means is Reliance Jio now can use close to 500,000 kilometer of fibre optic network spread over 300 cities across the country.

He also said that though the deal was signed yesterday, most of the hand-over process was completed much before.

Yesterday’s deal was third such ‘resource sharing’ deal between the two companies and is the biggest deal in terms of deal value. . Inter-city fibre optic deal in April 2013 and tower sharing pact in August 2013 are the other two such deals signed between the two brothers. Once rivals, they are now coming closer with these business deals.

Besides the two brother coming closer,the deals are of immense value for the respective firms. The infrastructure sharing with RCom would help Jio to roll out its much awaited 4g services in the country, as it does not have to build its own infrastructure. In the other hand the proceeds from these deals will help RCom minimizing its debt which is pegged at around Rs 40,000 crore.

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