Ambanis To Inject Rs 5000 Crore Into Infocom

The Ambanis are planning to inject about Rs 5,000 crore to Rs 7,000 crore over the next 3-5 years in the Rs 25,000 crore Reliance Infocom project.

Reliance Infocom, which has plans to become a major player in the telecom sector, is also expecting significant reductions in equipment and optical fibre costs owing to a global slowdown in the telecom sector.

Anil Ambani, managing director, Reliance Industries said at a press conference in Mumbai today, "Promoters' investment in the project will be pegged at Rs 5,000-7,000 crore. Reliance Industries will be the lead investor in the venture with a 45 per cent stake. We will see a significant cost reduction due to the worldwide consolidation taking place in the telecom sector".

Reliance has achieved a cellular subscriber base of 2,36,000, which implies a 167 per cent growth rate in its subscriber base against the industry growth of 87 per cent. The group has already submitted its bid for picking up the 25 per cent government stake in Videsh Sanchar Nigam. "VSNL has assets which may look attractive. If it provides us shareholder value, we will definitely go ahead with it," he added.

Commenting on investments in the infocom project, Ambani said that it had invested Rs 2000 crore through internal accruals. The company is also keen to offer limited mobility services through its basic telephony project.