Mithun Roy

Mumbai: Anil Ambani controlled Reliance Communications (RCom), the country’s second-largest wireless operator, is consolidating its overseas business under one umbrella — Reliance Globalcom.

Punit Garg, president, Reliance Globalcom said Reliance Globalcom, a subsidiary of RCom, will be headquartered in London and will soon come up with an initial public offer.

The new entity brings under its fold Flag Telecom, Yipes Communications and RCom’s international business. About $2 billion has been earmarked for capital expenditure over the next three years by the unit, which would be spun off shortly. The consolidation process will get over in the next 2-3 months.

But why bring the companies under one umbrella?

“It’s a strategy to consolidate the global communications businesses into a single business group. The new subsidiary will deliver a broad portfolio of data and voice services spanning enterprise, wholesale, managed services, and consumer segments.”

Reliance Globalcom owns over 20,000 km of fibre in the US and operates one of the largest carrier ethernet networks in the world, he added.

According to him, RCom wants to project a single image to consumers and business associates rather than 3-4 firms with separate names,which leads to confusion.

Reliance Globalcom would tap the global telecom market, which has an addressable revenue potential of $285 billion annually. With the consolidation of the global business, it will have annualised start-up revenues of $1.32 billion and Ebidta of $334 million.

To tap the huge opportunity in ethernet and application delivery services for global enterprises, the company plans to expand the coverage of Yipes to 20 new markets.Worldwide, ethernet margins are around 30-50% and it is estimated to be a $30 billion market in the next three years.

Source : DNA