India’s second largest mobile network operator by subscribers, Reliance Communications (RCOM), has announced that it has agreed to acquire cable television distribution firm Digicable in an all-stock deal. Following the purchase RCOM will merge its retail broadband, IPTV and satellite direct-to-home (DTH) services with Digicable, which is one of India’s largest cable television providers, with the combined entity to be renamed as Reliance DigiCom and worth an approximate USD1 billion, according to local reports. The newly formed company will offer more than 500 digital and 100 high definition TV channels, IPTV, video-on-demand and gaming services, and will reportedly be the largest triple-play provider in Asia, with a subscriber base of around eleven million homes.
The Reliance Anil Dhirubhai Ambani Group, RCOM’s majority parent, plans to spin off its DTH division, Reliance Big TV, into Reliance DigiCom, reports the Economic Times. RCOM will hold 60% in the special purpose vehicle, while Ashmore, a private equity fund, Jagjit Singh Kohli, the managing director and chief executive of Digicable and Yogesh Shah, the cableco’s joint MD, will own the remaining shares.
Commenting on the purchase, Anil Ambani, RCOM chairman, noted: ‘RCOM led the telecom revolution in India by growing its subscriber base to over 100 million in a short span of just five years … Reliance DigiCom will fuel our four-screen strategy to own mobile, cinema, TV and computer screens, leading to world-class convergence of information, communication and entertainment solutions and services. With this game-changing move, we hope to lead the next revolution in digital home entertainment in India.’ Part of RCOM’s plans for the new company include upgrading Digicable’s infrastructure to offer cable-based broadband internet access.