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RCOM discussing $3bn network contract with four firms
Wednesday, 22 February 2012 06:07

Reliance Communications Ltd. (RCOM) is in discussions with four companies for a $3 billion indenture to manage its mobile phone networks, a person possessing direct knowledge of the matter revealed Tuesday, as it attempts to slash expenditures to sharpen its competitive edge in India's fast growing but overly congested telecoms market. The telco is holding talks with L.M. Ericsson Telephone Co., Alcatel-Lucent as well as China's ZTE Corp. and Huawei Technologies Co., with intentions to finalise the contract within the next couple of months, the person told Dow Jones Newswires on condition of anonymity. Executives at the Indian units of Huawei, ZTE, Alcatel-Lucent and Ericsson weren’t available for confirmation. Mumbai-based Reliance Communications is an offshoot of the larger Reliance Group controlled by billionaire Anil Ambani, and is India's second-largest telco with over 150 million subscribers.RCOM has been buckling under high expenses, particulary because of the interest it is required to pay on $7.5 billion debt it took to purchase 3G spectrum in 2010 and roll out services. It has been attempting to sell stakes of its own or of a few units, but hasn't succeeded till now. Earlier this month, it posted a 61% Y-o-Y decline in net profit for the October-December quarter, which was the 14th successive quarter of a lower profit, affected by an impairment charge related to 3G bandwidth. Revenue for the said quarter also dropped by 1.8% to INR47.37 billion.

 

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