A decade after a family feud split Reliance Industries Ltd., billionaire Anil Ambani said his telecommunications company had achieved a "virtual merger" with the operator started by his older brother Mukesh.
Reliance Communications Ltd. will share spectrum, networks and towers with Mukesh's new mobile operator Reliance Jio Infocomm Ltd., Anil Ambani told shareholders in Mumbai Tuesday. Investments to roll out fourth-generation services across India will be funded by Jio, the younger Ambani said.
The world's second-largest mobile market by subscribers is ripe for consolidation as competition among India's dozen carriers have driven down phone rates to levels rarely seen in other countries. Reliance Communications had over 440 billion rupees ($6.6 billion) of debt as of March 31, 2016, according to Bloomberg data. This month, Reliance Communications announced a combination with smaller carrier Aircel Ltd.
Reliance Communications shares rose 1.3 percent to 48.05 rupees at the close in Mumbai. The shares have declined 46 percent this year.
With the merger with Aircel, and partnership with Jio, Anil Ambani said that Reliance Communications has enough spectrum and won't depend on the auction that begins this week, where India's government expects to raise as much as 5.6 trillion rupees. Ambani also said that his company would reduce its debt by 75 percent within a year.
A spokesman for Mukesh Ambani's Reliance Industries didn't answer calls or respond to a text message seeking comment.
In 2005, three years after the death of Reliance founder Dhirubhai Ambani, the Ambani brothers agreed to split their father's empire with Mukesh retaining control of the flagship, running oil, gas and chemicals, while Anil took the power, mobile-phone and financial-services businesses.