Reliance Industries Wednesday said it will buy majority stakes in Den Networks Ltd and Hathway Cable and Datacom Ltd for Rs 5,230 crore, a move aimed at becoming the largest player in the broadband as well as the cable TV and direct-to-home market.
The acquisition gives Reliance access to 24 million existing cable connected homes of these companies across 750 cities, thereby covering around half of its target to connect 50 million homes across 1,100 Indian cities.
According to latest data of the Telecom Regulatory Authority of India, there were little over 18 million fixed line broadband connections in the country in July, with BSNL leading the chart.
RIL announced to acquire 66 per cent stake in Den Networks for Rs 2,290 crore and 51.3 per cent in Hathway Cable for Rs 2,940 crore.
RIL said it will make “primary investment of Rs. 2,045 crore through a preferential issue under SEBI regulations and secondary purchase of Rs 245 crore from the existing promoters for a 66 per cent stake in Den Networks Limited”.
“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,” RIL Chairman and Managing Director Mukesh Ambani said.
Through this transaction, Reliance Jio will be strengthening the 27,000 local cable operators (LCOs) that are aligned with DEN and Hathway.
Reliance said it will work together with Hathway and DEN and all the LCOs to offer a “quick and affordable upgrade” to JioGigaFiber and Jio Smart-Home Solutions to the 24 million existing cable connected homes of these companies.
Reliance has plans to offer ultra high definition entertainment, multiparty video conferencing, virtual reality gaming and digital shopping, converged calling service between mobile and fixed line etc through its optical fibre based broadband network.
RIL would also make open offers in DEN and Hathway as well as for the GTPL Hathway, a company jointly controlled by Hathway with 37.3 per cent stake and Hathway Bhawani Cabletel and Datacomm Limited — a subsidiary of Hathway.