Reliance Communication ready for International forays

The patch-up by Ambani brothers by scrapping their non-compete agreement has paved the way for Anil group’s flagship firm, Reliance Communications Ltd (RComm), to explore a combination of foreign tie-ups for expansion.

While company officials were not available for comments, analysts maintain that with the right of first refusal (RoFR) also going away with the non-compete agreement, RComm and South Africa’s MTN could once again look at a merger possibility, making the Anil Ambani firm part of the South African telco, something rival Bharti had refused to do in 2008.

“The canvas is now wide open for RComm since it was this right of first refusal clause which restrained the company from getting into a potential transaction,” said Prashant Singhal of E&Y. However, a deal with MTN could entail huge cash outflows for RComm this time since valuations of telecom companies in India have taken a hit in the last two years, he pointed out.