Reliance Communications (RCom) has dipped 5% to Rs 110 on BSE after Reliance Jio Infocomm (RJI), the telecom arm of Reliance Industries, has entered into a definitive agreement with the company, for sharing tower infrastructure.
The aggregate value of the deal is Rs 12,000 crore over the lifetime of the agreement.
“Though this deal will allow RCom to improve its asset utilization, the company appears to be offering a significant discount,” says analyst at Angel Broking.
Assuming RJI has signed the agreement for balance life of the BWA spectrum, which is 17 years, the rent comes to around Rs 13,070 per tower per month, which is much less than what Bharti Infratel is operating at, i.e around Rs 36,000, said analyst.
Meanwhile, since April 2 this year, when the fibre optic network sharing deal was announced, RCom shares have gained around 85% from Rs 63 on April 2, 2013 to Rs 116 on June 7 this year on wide speculation of such a deal coming in.
The stock opened at Rs 117 and seen a combined 26.68 million shares have changed hands on the counter so far on BSE and NSE.
The aggregate value of the deal is Rs 12,000 crore over the lifetime of the agreement.
“Though this deal will allow RCom to improve its asset utilization, the company appears to be offering a significant discount,” says analyst at Angel Broking.
Assuming RJI has signed the agreement for balance life of the BWA spectrum, which is 17 years, the rent comes to around Rs 13,070 per tower per month, which is much less than what Bharti Infratel is operating at, i.e around Rs 36,000, said analyst.
Meanwhile, since April 2 this year, when the fibre optic network sharing deal was announced, RCom shares have gained around 85% from Rs 63 on April 2, 2013 to Rs 116 on June 7 this year on wide speculation of such a deal coming in.
The stock opened at Rs 117 and seen a combined 26.68 million shares have changed hands on the counter so far on BSE and NSE.
