Jio wins the bid to buy Rcom assets

Whats the story?

Soon after the RCom company owned by Anil Ambani declared about the proceedings to auction the assets, Reliance Jio has made a definitive agreement recently to acquire specified assets of RCom and its affiliates in an all-cash deal on Thursday. RCom said Jio had emerged as the highest bidder in a transparent process conducted under the supervision of a high-powered bid evaluation committee, comprising experts from banking, telecom and law.

Bid Value?

Market and banking circles attributed the deal size to be about Rs 24,000 crore, but neither companies confirmed this deal size. However, RCom said it would use the proceeds of the cash deal solely for prepayment of debt which is primarily weighed down by Rs45,000 crore of loans and the failed merger with Aircel.

What assets are sold?

"Jio or its nominees will acquire assets under four categories — towers, optic fibre cable network, spectrum and media convergence nodes (MCNs)—from RCom and its affiliates. These assets are strategic in nature and expected to contribute significantly to large-scale rollout of wireless and fibre-to-home services by the company." the telecom unit of Reliance Industries said in a media statement. RCom said, "comprises primarily of cash payment and includes transfer of deferred spectrum instalments payable to the telecom department (DoT)."

How RCom assets can help Jio?

Reliance Jio is in a track of gigantic growth. Though it has enough infrastructure to meet all requirements, the limit of strategic positioning of its assets is still in progress. Due to this, certain parts of the country are still struggling to cope with uniform and quality network signals. Owning the RCom assets would make this task of extending its wings more efficient, quick and fast. Occasional trolling in social media about insufficient network signal in certain parts has been a sort of embarrassment to Jio quality services. This moves are expected to reduce the dissatisfaction among the Jio users in less time.