RCoVL plans Rs 5000 cr capex

Investment to be funded via debt, internal accruals.

Reliance Communications Ventures Ltd (RCoVL) will spend Rs 5,000 crore every year for the next three years. The investment will be funded through a mix of debt and internal accruals.

Reliance-Anil Dhirubhai Ambani Group (R-ADAG), which recently acquired insurance firm AMP Sanmar for around Rs 100 crore, has also earmarked a capital expenditure of Rs 1,000 crore for the next "two to three years" in the insurance business.

"RCoVL will require Rs 2,500 crore a year for its wireless operations, Rs 1,500 crore for broadband, Rs 1,000 crore for global operations and Rs 500 crore for common servicing assets," R-ADAG Chairman Anil Ambani told reporters in a media briefing here today.

The company's wireless activities include its GSM business in the north-east, and fixed wireless and CDMA services across the country. The telecom business has a total subscriber base of 18.3 million.

The Rs 5,000 crore capex will be used for network expansion of its CDMA business to over 4,500 towns from the present 2,000 towns (which will be completed in months), expansion of its GSM operations, and roping in both enterprise and retail customers for its broadband business, among others.

RCoVL's global business comprises the recently acquired FLAG and to-be-commissioned FALCON submarine cable systems, banking on which the group is also looking at becoming a carrier's carrier.

Reliance Communications will be the holding company for Reliance Infocomm, Reliance Telecom and Flag Telecom and Reliance Communication Infrastructure, he said.

The group company will embark upon untangling crossholdings and move towards a "simple and clear" structure. "We will look at bringing in international governance practice," Ambani said, adding, "the demerger has resulted in avoiding crossholdings".

The company is going to roll out its internet protocol television (IPTV) initiatives by the year-end. It had earlier entered into a tie-up with the global software major Microsoft Corporation, which is also interested in investing in its IPTV venture.

On the investments in AMP Sanmar, he said it would be used for expanding the company's business presence and portfolio.

Ambani, however, did not divulge further plans for the insurance company.

Further, the group will seek shareholders' approval for tapping the overseas market, he informed.