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Reliance Communications plans to hive off DTH biz to pare debt

MUMBAI: Anil Ambani-controlled
Reliance Communications (RCOM) is
planning to hive off its direct-to-
home (DTH) business under Reliance
Digital TV as it seeks to cut debt
through sale of non-core assets.
A wholly owned subsidiary of RCOM,
Reliance Digital TV has the lowest
market share in the DTH hierarchy.
Earlier efforts to offload stake in the
DTH arm have been unsuccessful.
In contrast to other DTH players,
Reliance Digital TV has not been
aggressive on customer acquisition.
Instead, the focus has been on
customer retention.
Reliance Digital TV officials refused
to comment on the matter.
Apart from hiving off its DTH
business, RCOM is also looking to sell
its subsidiary Global Cloud Xchange
(GCX) and real estate monetisation
including the Dhirubhai Ambani
Knowledge City (DAKC) campus and the
marquee properties in and around
major cities of India.
“On the deleveraging front as stated
earlier, currently we are pursuing
multiple options—mostly around our
non-core assets. One is on the sale of
GCX, second is on the real estate
monetisation, including the DAKC
campus and the marquee properties in
and around the major cities of India.
The third one is the hive-off of our
DTH business,” RCOM CEO of consumer
business Gurdeep Singh told media
RCOM’s current annualised net debt to
EBITDA ratio stands at 4.64 and the
aim is to get this down to 3.5 by
March 2017 through these initiatives.
Singh said that Reliance Digital TV has
a 7 per cent share of the DTH market.
“We have nearly 7 per cent of the DTH
industry market share and we
continue to hold our market share in
the DTH business,” he added.
Singh also clarified that the 7 per
cent market share is on the subscriber
base and on the revenue side. “Our
ARPU is similar to the average of the
industry,” he noted.
Reliance Digital TV has 4.87 million
subscribers. It is available at more
than 35,850 outlets across 8,366
cities in the country.
Reliance Digital TV delivers over 259
channels in HD-like quality, including
four exclusive movie channels and
four interactive services to its
This is not the first time RCOM is
looking to hive off its DTH business.
In 2010, the telco was planning to
hive off its DTH and internet protocol
TV (IPTV) businesses into a separate
company called Reliance Digital Works.
However, things did not materialise as
the telco had accumulated huge debt
and had to focus on bringing it down.
In between, RCOM was in talks to
merge its DTH business with Sun
Group’s Sun Direct. The deal made
sense for RCOM as both DTH operators
are located on the same satellite.
However, the talks with Sun Direct
fell through and it was business as
usual for Reliance Digital TV.
Reliance Digital TV and Sun Direct’s
partnership goes back a long way. In
September 2010, the two companies
had entered into an arrangement to
share their back-end infrastructure
to jointly beam the free-to-air (FTA)
channels. The move was aimed at
overcoming bandwidth crunch and
reducing operational costs.

Reliance Communications plans to hive off DTH biz to pare debt

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