Mumbai (Maharashtra) [India], Oct 17 : Mukesh Ambani-owned Reliance Industries Limited (RIL) has announced its strategic investment in and partnership with Den Networks Limited and Hathway Cable and Datacom Limited.
In a statement published by the company on Wednesday, the RIL announced a primary investment of Rs. 2,045 crore through a preferential issue under Securities and Exchange Board of India (SEBI) regulations and secondary purchase of Rs. 245 crore from the existing promoters for a 66% stake in Den Networks Limited (“DEN”), and Primary investment of Rs. 2,940 crore through a preferential issue under SEBI regulations for a 51.3% stake in Hathway Cable and Datacom Limited (“Hathway”).
Apart from DEN and Hathway, RIL would make open offers for GTPL Hathway Limited, a company jointly controlled by Hathway with 37.3% stake, and Hathway Bhawani Cabletel and Datacomm Limited, a subsidiary of Hathway. “Reliance is privileged to partner with the Rajan Raheja Group, one of the most respected business houses in India, and Sameer Manchanda, a first generation entrepreneur, who have created strong businesses through their business acumen and perseverance.
Reliance has the highest regard for the management teams in the respective companies and will work with them to further strengthen and improve business operations,” the statement from the RIL read. “These strategic investments are in furtherance of Reliance’s mission of connecting everyone and everything, everywhere – always at the highest quality and the most affordable price and transforming India’s digital landscape.
After having taken India to the top position in the mobile broadband space, Reliance is now committed to taking India from a global rank of 135th to among the top-3 countries in the world on wireline digital connectivity,” it added. These investments and partnerships are expected to create a win-win outcome for the Local Cable Operators (“LCOs”), Consumers, Content providers, and overall eco-system.
Talking about the new partnership, Mukesh Ambani, Chairman and Managing Director, RIL commented, “We are glad to join hands with Rajan Raheja and Sameer Manchanda, two of the pioneers in the MSO industry.
Our investments in DEN and Hathway create a win-win-win outcome for the LCOs, customers, content producers and the eco-system.” Over the last 25 years, India has connected about 175 million homes with basic coaxial cable technology. This has been made possible because of the efforts of hundreds of thousands of LCOs, who operate in every neighbourhood of our country.
However, the LCOs have been steadily losing market share because of increasing competition from alternate technologies like Direct-To-Home (“DTH”). In fact, DTH operators have weaned away over 60 million homes from cable operators who have remained basic TV service providers. With this trend, both the LCO business model and the MSOs are under stress.