Billionaire Mukesh Ambani’s Reliance Industries Ltd. agreed to buy the Indian partner of Viacom Inc. for 40 billion rupees ($678 million) to gain news and entertainment content for its new mobile phone company.
Reliance, through Independent Media Trust, will control 73.1 percent of Network 18 Media & Investments Ltd. and 55 percent of TV18 Broadcast Ltd., the Mumbai-based company said in an exchange filing yesterday. An open offer triggered by the deal may raise the stakes to 95 percent and 81 percent respectively, according to the filing.
Ambani is spending about $11 billion on a high-speed fourth-generation cellular network to tap rising data usage among India’s 890 million phone users as gaming and mobile social networking surge in the world’s second-biggest market for mobile phones.
“We call this a diversified-service provider strategy,” said Kamlesh Bhatia, Mumbai-based research director, Gartner Inc. “It’s a smart move by Reliance. Globally, telecom operators have explored the opportunities of owning and aggregating content with a view to continue to hold subscriber attention.”
Reliance Industries is primarily engaged in oil and gas exploration and owns the world’s largest refining complex. It also manufactures downstream petrochemicals, polymers and polyester products.
Return to Telecom
The rollout of its phone service will mark the return of Mukesh Ambani, 57, to telecommunications almost a decade after he handed over the group’s phone business to Anil, 54, as part of a split following a family feud.
Reliance Jio Infocomm Ltd., a unit of Reliance Industries Ltd., has erected at least 10,000 signal towers as it accelerates plans to start 4G services later this year, two people familiar with the matter said in April. In February, the company spent $1.8 billion to buy airwaves to compete with Vodafone Group Plc, the world’s No. 2 mobile-phone company by users, and billionaire Sunil Mittal’s Bharti Airtel Ltd.